MP Kh.Badamsuren, chairman of the working group on amendment of the Mineral Law of Mongolia: Oyu Tolgoi draft agreement negotiation procedure is accelerating.
Not much improvement has shown at the spring session of State Great Khural on adopting draft agreement on Oyu Tolgoi investment. The current update is made by MP Kh.Badamsuren.
Q: Can you update us on Oyu Tolgoi investment agreement?
MP Kh.Badamsuren: Working groups of the Standing Committee of State Great Khural prepared its comments and findings and handed to the Government. The Government will discuss it with the investing side. I think both sides are negotiating on it. You can understand that the negotiation making is accelerating.
Q: There was news about the response of “Ivanhoe Mines”. If the deal making is lagging, it might take us until the end of September. Is it true?
MP Kh.Badamsuren: Investors made their response. Related officials are making negotiation with the Government of Mongolia. It must be win win deal. Official response is one thing. Right now, officials are working on to reach the common consent. Therefore, I believe that there is a progress in deal making. I hope that the Government will present its deal making result to the working groups. Then much more will be clear.
Q: Is there many issues that causes disagreement?
MP Kh.Badamsuren: Parties don’t agree on the state ownership issue. Both sides are paying attention on profit making from the factory and company will be established on the project. Obviously, the Mongolian side will seek to impose income tax, royalty and other related payments. Also the dividend issue will be raised, if Mongolia owns certain ownership in the company. Basically, we are expecting the result from the negotiations between investors and the Government.