Mongolia Business and Mongolian Daily Business News

Proceeds to be used by Ivanhoe to acquire critical mining and milling equipment for the Oyu Tolgoi copper-gold complex in Mongolia

LONDON, ENGLAND — Robert Friedland, Executive Chairman of Ivanhoe Mines, and John Macken, President and Chief Executive Officer, announced today that the company has entered into an agreement to issue 15 million common shares to Rio Tinto at CDN$16.31 per share, for net proceeds of CDN$244.7 million (US$232.4 million*).

Ivanhoe Mines will use the proceeds to purchase from Rio Tinto key mining and milling equipment to be installed during the construction of the Oyu Tolgoi copper-gold mining complex in Mongolia.

The equipment includes principal components for the 100,000-tonne-per-day Oyu Tolgoi phase-one copper-gold concentrator, including two large, 38-foot-diameter, semi-autogenous grinding (SAG) mills, four ball mills, re-grind mills, crushers, motors, gearless drives, conveyors and flotation cells. Also included is the hoist and major components for the sinking of Shaft #2 — the 10-metre-diameter, main production shaft for the underground block-cave mine at the Hugo North Deposit. Read the rest of this entry »

Oyutolgoi Investment Agreement, which has been signed last October, shall come into effect on April 6 of this year and Oyutolgoi LLC shall commence its operations officially. Oyutolgoi is preparing all plans and projects until the effective date.

However it didn’t provide the feasibility study, which has been rejected because officials explained there were some issues to be clarified. As reported by Oyutolgoi, there are 2-3 issues including water supply and resource. In order to clarify whether Oyutolgoi has spent over USD one billion for the project, the audit and tax reviews are being carried out. It will not start recruiting employees until the effective date.

NEW YORK, NY — Ivanhoe Mines Ltd. marked five successful years of trading on the New York Stock Exchange (NYSE) today when Executive Chairman Robert Friedland rang the opening bell in a traditional ceremony signalling the start of daily trading.

Mr. Friedland was joined on the bell podium by guests and executives who included Sangajav Bayartsogt, Mongolia’s Minister of Finance; Andrew Harding, Chief Executive of Copper for Rio Tinto; Lawrence Leibowitz, Group Executive Vice President of NYSE Euronext; John Macken, CEO and President of Ivanhoe Mines; Peter Meredith, Deputy Chairman of Ivanhoe Mines; and former Massachusetts Governor Bill Weld, a Senior Adviser to Ivanhoe Mines.

Mr. Friedland said that during the past five years Ivanhoe Mines has emerged as a significant developer of mineral projects in the Asia Pacific region.

“Ivanhoe and its strategic partner, Rio Tinto, are building one of the world’s largest copper-gold mines at Oyu Tolgoi, in Mongolia, and have signed a landmark Investment Agreement with the Mongolian Government. SouthGobi Energy Resources, a subsidiary, is exporting high-quality coal to China from its first mine in Mongolia and another subsidiary, Ivanhoe Australia, has discovered the world’s highest-grade direct source of rhenium and molybdenum.” Read the rest of this entry »

A total of seven of the required 10 conditions precedent now have been satisfied since the signing of the Investment Agreement on October 6, 2009.
The conditions were:

• the increase of Rio Tinto’s ownership stake in Ivanhoe Mines from 9.9% to 19.7% through a US$388 million payment to Ivanhoe;
• the conversion into mining licences of exploration licences held by Entrée Gold on extensions of the Oyu Tolgoi mineralized trend, whose development is covered under a joint-venture
• agreement with Ivanhoe Mines;
• the establishment of a Standing Working Committee, comprised of representatives of the Government and Oyu Tolgoi LLC, which will operate during construction of the mining complex Read the rest of this entry »

The long awaited Oyu Tolgoi investment agreement was finally signed. This IA travelled very long distance and everyone is grateful to be at this stage. Experts have calculated that supply of copper is insufficient if the world’s population grows at this rate for the next 50 years. The long awaited IA was finalized during this crucial moment.

Statistics reveals that 14 million tons of copper commodities are used worldwide and 4 million tons or around 30% are supplied by Republic of Chile. Currently, Mongolia supplies 1% of world supply and the amount is to be increased in the future. Read the rest of this entry »

We have asked few questions from G.Arslan, Head of “Honesty citizen’s front” movement regarding Oyu tolgoi issues. Unofficial news reported that they will be organizing a protest at the Sukhbaatar Square.

Q: Is it true that civil movement organizations will protest at the Sukhbaatar square tomorrow (today).

A: We are not organizing a protest. We are organizing a press conference.

Q: You are organizing a press conference for what reason? Read the rest of this entry »

The SGK approved the four draft laws during yesterday session. The ideal environment for signing OT IA was built by the Government and SGK. We have asked few questions from S.Bayartsogt, Minister for Finance, regarding the investment agreement.

Q: The Government presented four laws were approved by the SGK. You would not face any difficulties to sign the agreement now? Read the rest of this entry »

Draft amendment on the law on windfall profit tax, law on water, law on road and corporate income tax were all passed today. Earlier, we reported that the two laws were passed by the SGK. Law on windfall profit tax and law on water were discussed by the standing committees on budget and environment, food and agriculture around 6pm and passed to the SGK. These laws were then approved by the special session of the SGK around 7:30pm. The law on windfall profit tax was passed with 85% vote and law on water was passed with 90.9% vote. This means that 6 years waited IA of OT went to the right direction and passed back to the Government. D.Demberel, Speaker of the Parliament gave speech at the closing session of the SGK.

First discussion of law on water was discussed by the standing committee on Environment, Food and Agriculture. The discussion of law on water was started last week. Water can be used for agricultures purposes as the environment for limiting the amount of water used is created. MP J.Enkhbayar said that this amendment should be added to the draft law. This amendment collected 9 votes out of 17 therefore the ground water collected by the investors can be used for agriculture purposes.

L.Gansukh, Minister for Environment and Tourism presented the draft law to the Standing Committee on Environment, Food and Agriculture during yesterday’ during yesterday’s meeting. The current mineral laws 26.5 and 27.1.6 says that period for the use of water within the mining companies is 30 years and after that it is extended every 20 years. Oyu Tolgoi is predicted to use 800 liters of water per second. Used water should be re-filtered and used again. This is included in the IA proposal said the Minister L.Gansukh. The water payment will be calculated according to the price of the day. The members of the standing committee have 100% supported the draft law on water to be discussed at the SGK session but members warned that the danger to the environment must be calculated correctly.