Mineral Law of Mongolia would be amended

MP D.Gankhuyag, B.Bat-Erdene, G.Bayarsaikhan, Ts.Davaasuren, Z.Enkhbold presented the drfat amednment to the Mineral Law of Mongolia to Mr D.Demberel, the Speaker of the State Great Khural.

Current effective Mineral Law of Mongolia has many advantages than its previous version which was adopted in 1997, but lawmakers think that its some provisions might conflict with the Constitution of Mongolia and other laws with its ownership issue of the mineral.
Therefore, this amendment reflects issues and legal arrangements on relations of ownership of strategically important deposits, state involvement in the exploitation of the deposits and criteria of selecting partners on the deposits which are explored by the State funding. Also they decided to make it clear through this amendment the issues such as limiting share issuance of the of the license holder, clarifying the responsibility issues of the share issuing company and distributing captial and profit share.

The amednent further suggests that investment agreement is not necessarily be strictly 30 years, legislating the state support and involvement of providing mineral resources to the market and strengthening the product competent capacity.

6 comments

News…..
By Tony Barrett
June2 (Bloomberg)–Rio Tinto won’t be able to accomodate some of the demands being made by the Mongolian parliament over the company planned development of the Oyu Tolgoi copper and gold deposit.
We are about to respond to their feedback and we will megotiate with the governemtn on those items, Rio Tinto Copper Chief Executive Bret Clayton said at a conference in London.
“We w9ill be able to accomodate some of those things and we will NOT be able to accommodate some of them”.

Sounds like two MORE years of negotiations to me.
“B”

Barry,
With the other mining properties Ivanhoe has going right now, and some like the Merlin project seem promising, do you think IVN is still at a good value if this OT deal falls through. I have been debating for awhile to sell (I really wish I did earlier, but that’s hindsight talking) because I do not think this deal is going to go through in time to get this mine up in running by the next commodities boom or honestly probably not ever.

I understand the arguments I see on this site that both the company and the country wants the best deal possible, well that’s just common sense. However with the all the political posturing and bickering this process is just moving to slow. On top of that there is a lot of effort to demonize Ivanhoe (again for political posturing) and it is going to be harder to garner public support to speed up the process. That last part is a though shame because I read about all the good Ivanhoe has done for the surrounding area, but that’s just how politicians are and that is how they are in pretty much every other country.

Kris,
My impression is,,,,
That RTP / IVN never know what to expect next from the Mongolian side of discussions.
Mongolians have some 16 taxes, and or assesments that they take from OT, to date they have not contributed a single dime to the effort to develope OT. Promising each Mongolian citizen 1,500 MNT from OT, (contribution to “Motherland Fund”), was a very good election promise. It got Mongolia a President that thinks like Putin.
What other distribution are expected to be garnered from OT? What are the points that IVN / RTP are not willing to accept the agreement as last presented? What parts of the Constitution are being violated?
Until this agreement is signed, NO mining company is going to begin developement or seek additional licenses, now that includes coal.
Ivanhoe is a very good explorer. They have plenty of other interests to persue. Their Rhenium find in AUS was great, but many years from seeing production. Khasikstan gold mine, producing now and profitable, can be expanded, and will be. Better use of funds, IMO. Also expansion of South Gobi coal mines in IND, can and will be expanded, they also are profitable, and very close to China coast.
I do NOT expect an agreement during the spring session, maybe not the fall session either.
Economy of Mongolia now at jeopardy. They cannot remove themselves from recession, umemployment will flourish. Debt to Russia and China will haunt them.
Maybe IVN / RTP should sell OT to Russians, that would really give them leverage in Mongolia. they would have them over the perverbial barrel.
Nothing good will come from this agreement as it is now. Can you say, See you in court.
“B”

Yes, Barry your impression is right. There is few corrections in your info the money promised during the election by political parties is called collectively “Grant of the Motherland” which is 1.5 million MNT per every citizen.

Leave a Reply

*