Spring session of the State Great Khural would be officially closed on July 1 2009. There are few important issues to discuss and resolve before it, including amendment in Law on the Management and Funding of the State Organizations, Oyu Tolgoi draft agreement, Draft resolution on the State Policy on radioactive minerals and nuclear energy and the draft law on establishing agricultural area zone.
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Spring Session will close before Naadam, July 11, 2009. Any reason why it’s closing so early?
It is according to the law of State Great Khural, I guess.
So do you think we get the IA signed before the end of Spring Session?
No, It is so little time to solve/sort this out. It will surely take us to the end of this year
So, we seem to be stuck in an endless loop.
The last I checked, they had agreed on most of the major parts of the IA, all that was left was to fine tune it.
IVN, as it always seems too, feels that an IA was going to happen this time.
Just my thoughts.
As IVN / RTP had indicated, there is need to start from the beggining and redo the entire IA.
Until the Minerals laws are redone, there will be no ground on which to negotiate the IA.
Remember this is a project where the Mongolian government has put no money into the exploration or development at OT. It matters not what percentage of OT the Mongolians own, as long as it is less than 51%. To put money into the governments pocket, they simply raise taxes on production, (product sold). The Mongolians plan seems to be to keep ALL possible money inside of Mongolia, let no profit escape. either through dividends or taxes.
This approach is causing foriegn mining interest to seek other countries, considering Indonesia and even Africa as more attractive areas to invest.
I do not see how it is possible to reach an agreement at this time, or any time in the foreseable future.
Mine production in Mongolia is slowing down almost every where for all resources.
OT is falling so far behind in their production schedule they will be lucky to see production of any resource (sales) in the next 4 years. NOT a very bright outlook for Mongolia.
“B”
June 18th article publishjed by Bloomberg.
Quote from Masa Igata, chief executive officer of Frontier Securities in Ulan Bator. ” No miner wants to wait three years,” he said yesterday. “If I were management of Ivanhoe or Rio Tinto, I might want to sell the stake to someone else”.
Elbegdorj said reaching an agreement is his first priority on the economic front, though he gave no more specific time frame for a deal than the next three years. ” We approachintg the final moments to get a good agreement”, Elbegdorj said. ” I would like to say to foreign investors: ” Do not close the door, there are still opportunites”.
These comments do not bode well for getting an agreement signed before the end of the Spring Session of the SGK.
Only a couple of weeks remain, and it appears that the negotiators are as far apart now as at any time in the last 5 years.
Comments made by other mining investors shows that Mongolia is not being considered as a good investment environment.
IVN stock price dropped 8.7% , the biggest decline since May 25th.
The entire Mongolian economy and its citizens will sufer greatly in the next few years because of the negotiators inability to reach agreement.
Does anyone know what the GDP was in 2008 of Mongolia?
Sad state of affairs. “B”