2nd week of OT discussion
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Loading ...It had been 8 days since the start of the OT IA discussion between the Government and the investors. Some may believe that the day is coming because during some days discussions continued till midnight and even on the weekends. Government declared that they will not report publicly about the discussions before IVN and Rio reach a point and make decisions. That is their new house rule. The discussions may end this week and everyone is waiting for positive news eagerly. Everyone around the globe is waiting for news. 80% of Mongolian people want this IA to go forward and start giving its benefit as soon as possible.
Comments from experts:
D.Zorigt, Minister for Mineral Resources and Energy:
The current IA of OT is not able to go through as IVN and Rio already have refused it. We are to wait for the next SGK session whether it takes place soon or in autumn. The government prepared two alternatives for the party groups. First to own 34% and offer certain tax waiver or redemption in order to launch huge creation and the second one is to benefit from tax income without ownership of 34%. The latest resolution is the mix of these two alternatives.
N.Dashzeveg, Director of Mongol University, Expert Economist:
By theory, this resolution of the IA is able to go through. It just means that the deal is the same as Erdenet. Investors want better deal because 3 leaders, PM, Speaker and the President showed different interest and shares different opinions regarding this OT project. If good offer is made then of course SGK has no problem with it. There is also not enough information about the copper commodity in Mongolia. If Investors want tax waive or redemption they will have to provide their economic evidence that they could not pay the taxes in the current situation. This way that both sides will be clear of what the cost is and how much profit will be made. Currently, the PM wants 55-77% of the profits. This figure made by the Ministry of Finance needs to be monitored.
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About the Author: Badrakh Batkhuyag
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That 55% to 77% when all assessments and fees and taxes are figured comes out to be closer to 95% of profits.
No reason to do business in Mongolia, cannot make a profit.
Look elswhere. Anywhere else, from the looks of it, would be a better investment. Close the mine down to maintenance level, send workers home for a vacation, work on Indonesian, Kazakstahn and Australian mines. Might take a little longer, but so will OT IA.
Good luck, how many other mines are cutting back on production?
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