Ivanhoe to Resume Talks With Mongolia on Copper Mine

Jul 22 • Mining • 571 Views • 9 Comments on Ivanhoe to Resume Talks With Mongolia on Copper Mine

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By Rob Delaney

July 21 (Bloomberg) — Ivanhoe Mines Ltd. said it will resume talks with Mongolia on July 27 aimed at concluding an investment agreement on the Oyu Tolgoi copper-gold project it plans to develop with Rio Tinto Group.

Mongolia’s government said it “will work with the companies to reach an agreement that is ‘mutually beneficial, fair and sustainable,’” John Macken, chief executive officer of Vancouver-based Ivanhoe, said today in a statement.

Ivanhoe has tried for more than five years to reach an agreement from Mongolia to develop Oyu Tolgoi and benefit from demand in China, the biggest metals buyer. London-based Rio called Oyu Tolgoi “the world’s largest undeveloped copper-gold resource” when it agreed to buy 10 percent of Ivanhoe in 2006.

Mongolia’s lawmakers voted to authorize the government to complete an agreement that would allow Ivanhoe and Rio to develop the deposit, Ivanhoe said last week.

Oyu Tolgoi is about 80 kilometers (50 miles) north of Mongolia’s border with China. In March 2008, Ivanhoe estimated the copper resources in the project at 78.9 billion pounds and the gold resources at 45.2 million ounces.

Ivanhoe fell 23 cents, or 2.6 percent, to C$8.46 at 4:10 p.m. in Toronto Stock Exchange trading. The shares have declined 29 percent in the past 12 months.

Source: Bloomberg

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9 Responses to Ivanhoe to Resume Talks With Mongolia on Copper Mine

  1. Eric says:

    HANTULGA,

    How can Prim. Bayar negotiate a deal with Ivn / Rtp when parliament included the windfall tax that both Ivn / rtp
    have both said they wouldn’t agree to in the past.

    In other words Bayar can’t eliminate the windfall tax without parliament, so what could Prim. Bayar possibally have to negotiate with?

  2. OTuten says:

    Eric, I think they will negotiate when the next discussion will be.

  3. eric says:

    So then what is the point to meet? Isn’t PM S.Bayar going to look bad if he keeps saying I have the authority to conclude this deal and then needs to go back to Parliament and start over.

  4. Barry says:

    From previous articles published I gather that there are some 16 taxes and assesments on mining companies.
    There is most likely room to adjust some of these taxes and place the responsibilities on the government to pay for what ever those taxes were for.
    Just a guess on my part. But the negotiators seem pretty solid in their belief that they can get a deal done without SGK involvement.
    That remains to be seen though in MY opinion.
    The deal is not done until it is done,,,,,approved by ALL involved and signed by all parties.

    I wait

    “B”

  5. Hantulga says:

    That’s why it’s called ‘Mission Impossible’ for PM S.Bayar.

  6. Tulgaa says:

    I agree with Hantulga. It will solve or break everything. We’re talking about the Mongolian Government here as well. If the deal won’t get done, then the government will be pulled down by the Parliament. So, basically, there is 0 chance that the deal will not be approved.

  7. Eric says:

    What do you think about what has been said in this article?

    http://en.news.mn/news/3126

  8. Barry says:

    I see a problem also Eric.
    It is nearly impossible to get a straight answer from anyone on the TAX Law issue.
    Maybe we can get some staight answers after the next meeting.
    I am NOT counting on that happening.
    I think the negotiators understand the problems, I do NOT think they have a solution. This one agreement has been discussed for so long that everyone on both sides should know what the contentiuos terms are, and what is needed to reach a mutually agreeable IA. Can they ever reach concensus?
    “B”

  9. Eric says:

    At the end of the day Prim. S.Bayar will need to go back
    to Parliament to finalize an IA.

    This thing doesn’t get done until Nov.

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