MONGOLIAN LAW (Draft)
Date Ulaanbaatar
AMENDMENT TO THE THE MINERALS LAW OF MONGOLIA
1. With reference to Minerals Law of Mongolia, Article 5. Ownership of minerals, Clause 5.4, which states “The State may participate up to 50% jointly with a private legal person in the exploitation of a mineral deposit of strategic importance where State funded exploration was used to determine proven reserves. The percentage of the State share shall be determined by an agreement on exploitation of the deposit considering the amount of investment made by the State” to be amended as “Strategic mineral deposits where State funded exploration was used to determine proven reserves shall be deemed 100% property of the State. In the instance of a joint development of the strategic mineral deposit with a private legal person, the State may participate up to 50% jointly, and State will utilise transparent means to develop the mineral deposit.
In the instance where the financial source is lacking, risky or is deemed unnecessary, the private legal person, whether national or foreign, having any percentage of the shares shall be liable to taxation from the period when the mine goes into operation, taking into consideration national economic security and based on feasibility study to determine the amount of financing necessary, and through open tender process.”
5.4.1 “With reference to Clause 5.4, the tender threshold amount will be based on feasibility study that takes into consideration proven reserves, the current market value of the reserves and the amount of financing that is deemed necessary. The amount of financing required shall be determined through confirmation of an independent auditing organisation”.
5.4.2. “With reference to the development of mineral deposit, the investment agreement shall be made between the State and a private legal person.”
2. With reference to Article 5, Clause 5.5, “The State may own up to 34% of the share of the investment made by a license holder in a mineral deposit of strategic importance where proven reserves were determined through funding sources other than the State budget. The percentage of the State share shall be determined by an agreement on exploitation of the deposit considering the amount of investment made by the State” to be mended as “ гэснийг “The State, as owner of the property, may own up to 34% or wholly own the share of the investment made by a license holder in a mineral deposit of strategic importance where proven reserves were determined through funding sources other than the State budget. The percentage of the State share shall be determined by an agreement on exploitation of the deposit considering the type of minerals, proven reserves, the current market value of the reserves and the amount of financing that is deemed necessary. The process and outcome of the investment agreement shall be made made transparent to the public.”
5.5.1 “With reference to Clause 5.5, in case of disputes between the State and private legal person, and if it causes harm to the national economy, and in the case that the agreement cannot be continued further, the State as owner of the property, in connection with international standards will adhere privilege to tax paying license holder, based on feasibility study, national security and amount of financing requred to develop the mineral deposit, through open and competitive tender procedure to local or foreign investors. Percentage of ownership can be determined based on amount of risk taken in discovering reserves, total costs incurred and whether it is in their interests of the parties. The agreement negotiation proces and the outcome shall be tansparent to the public. Determining of exploration risk and the amount of expenses incurred in exploration will be in a
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What is the possibility that these changes will be passed by GSK before July 1?
Will there be a complete translation available to the public, and where would interested people find this?
What is the possibility that an agreement will be completed between IVN / RTP before July 1.
When will it be known that these changes are acceptable to the Mining investors around the world.
Mongolia cannot wait for several more years to begin receiving revenues from increased min production.
Mongolia will be virtually bankrupt by then. “B”
You crack me up Barry!
I will return the favour;
Its the first week of July and Perenleejantsan cant stop talking about Naadam. Morning, noon and night all he talks about is the upcoming Naadam. One day his wife turns to him and says “All you talk about is Naadam, I think you like Naadam more than me!”; He retorts, “Thats not true! I like you better than Archery!”
Your pal,
Tmax
so what?
Barry shops in Tmax.
Barry talks about the Tmax always. He should not talk about things he never buy. Should talk only things he buys and affords to buy or he needs to buy. Any things he could not afford or does not belong to him are should stay there. So let it be Barry, Tmax, Arthur and whoever have the junk stocks of Ivanhoe. Mongolians lived without Ivanhoe and they will in the future. Don’t push them or try to convince power of money.
Having not seen this before am I the only person noting the almost total ambiguity of these proposed laws, that leave me questioning what the implications are, if I ever found a mineral ‘deposit’ in Mongolia. Can anyone explain just a few of these ambiguities:
- ‘Reserve’ is that a reserve as defined by current International Standards, or reserve as defined by Soviet standards that no company/bank/security would accept.
- “shall be liable to taxation from the period when the mine goes into operation, taking into consideration national economic security and based on feasibility study to determine the amount of financing necessary, and through open tender process.”……….what exactly does all that mean?
- 5.5.1 “Percentage of ownership can be determined based on amount of risk taken in discovering reserves, total costs incurred and whether it is in their interests of the parties.”……then right after that it states in a “transparent process”. If it is transparent, as it states, is there a formula already worked out that defines this……can anyone confirm???????
- 3 “The financing raised and profit allocation is to be set in acordance with related Mongolian laws.”…….where is this ’setting’ defined in crystal transparency?
- 4 “The State MAY render SUPPORT to finished mineral produce makers to maintain competitiveness on the international market”…….I guess this MAY also could mean ‘may NOT’ if it politically expedient and I do not see definition of ’support’
I also noted Minister Zorigt’s above interview is also ambiguous other than Mongolia’s idea of a mix of two ideas is to NOT give any tax relief to help start Oyu Tolgoi, as is done in most western countries, AND own 34%. Do the various Mongolian politicans, including the new president, who is asking for $24 billion foreign investment in mining, think that this standard being set will really obtain that foreign investment goal any time soon?
give me your gold mongolia, i demand it.
-Kremlin