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 »

Dec. 7 (Bloomberg) — Ivanhoe Mines Ltd., the Canadian miner developing the Oyu Tolgoi project in Mongolia with Rio Tinto Group, said the companies may spend $758 million next year to develop the copper and gold deposit.

Ivanhoe and Rio signed an agreement in October with Mongolia’s government to develop Oyu Tolgoi, which Rio has called the world’s largest copper-gold resource. Read the rest of this entry »

Minister for Finance S.Bayartsogt informed that OT IA signing ceremony will be held on Wednesday September 30 2009. According to his statement “… OT IA preparation work is underwent and its final wording (English, Mongolian) is being made. The final date of IA signature will be on September 30 2009.” After approving the related regulations and proceedings, an official letter of invitation of the Government to visit to Mongolia was sent to the Directors of Ivanhoe Mines and Rio Tinto.

Therefore, John Macken, in charge of legal issues, arrived in Mongolia. Today, Ivanhoe Mines Chairman Robert Friedland is landing in UB. The day of signature is tomorrow, therefore, he is visiting to Mongolia.

The working group on OT IA made significant progress over the past course of negotiations and made every detail of the agreement in compliance with the current effective laws and regulations of Mongolia as directed by the Parliament’s Resolution No.57.  Members of the working group, Ministers S.Bayartsogt and D.Zorigt presented four draft laws to the Speaker of the Parliament. The SGK is to make amendments for Mineral Law, Law on Water, Law on Road and Law on Corporate Income Tax. These draft laws will also benefit the mining sector as well as the Oyu Tolgoi and provide better environment for other investment agreements in terms of laws and regulations. Read the rest of this entry »

PM S.Bayar shares his information on the OT IA following a closed irregular session of the cabinet ministers.

Q: Does the government think that the special session of SGK is required?

A: We discussed this issue during last Friday’s cabinet meeting. The issue will be discussed by the meeting of National Security Council during the evening (yesterday). The decision made by the National Security Council will then be re-discussed at the tomorrow’s cabinet meeting (today). After this the Government should present all the possible draft laws to the SGK for amendment. Then, we will officially request for special session of SGK to be held next week. Read the rest of this entry »

RIO TINTO

Personal Credential Letter

14201 Ulaanbaatar
Government House
Sukhbaatar Square 6

Date: 27.07.2009

Dear Honorable Parliamentarian____________________________, Read the rest of this entry »

We have informed that OT investors sent letters to MPs regarding the IA. The letters did not get to the hands of the PMs yet but we have published the letter with signature of Sam Regal, leader of the working group of the investors. In this letter they have stated that “during this important period of this IA we are able to make official meeting and provide answers if you have any questions or doubts regarding the IA or the OT project “. The letter also mentions about the importance of OT to Mongolia as this will kick start the economy and social development through providing thousands of workplaces and business opportunities. Rio Tinto sees this as new era of Mongolian mining development. Read the rest of this entry »

IA of Oyu Tolgoi was discussed yesterday between the Government, IVN and Rio Tinto. They have sat at the table for the 4th time. Sam Regal, leader of the working group of the investors had met with D.Zorigt, leader of working group of the Government and S.Bayartsogt, Minister for Finance. Sam Regal is responsible for all investment agreement of Rio Tinto.
Working group of the Government presented the resolution No 57 to the investors. This means the Government is only allowed to make agreement under the current principle made by the Standing committee on Economy. The guidance is to make the agreement without tax waive or redemption. The IA discussion will continue to resume today.

MP Z.Enkhbold shares his opinion on OT IA which was the main highlight of the last week.

Q: The Government received the task to reach a deal with investors to agree upon 34% ownership and imposition of all types of taxes without waives including windfall tax. What do you think about it? Our counterpart will be happy with it?

MP Z.Enkhbold: We are not going to get free. We are going to get it with payment. Our counterpart fails to raise capital, but we agree to pay our part. Actually, we are helping our counterpart by buying our share. Read the rest of this entry »

March 3 (Bloomberg) — Rio Tinto Group, developing the Oyu Tolgoi copper and gold deposit with Ivanhoe Mines Ltd. in Mongolia, may sign an accord this week with the government allowing the companies to begin mining, an official said.

“This agreement is almost done,” Baldanjav Ariunsan, Mongolia’s deputy minister of minerals and energy, said through a translator in a meeting with investors in Toronto yesterday. “It will go to the parliament and it will be approved, I think, at the end of this week.”

Ivanhoe has been trying for more than five years to win an investment agreement with Mongolia to benefit from demand in China, the biggest metals buyer. Rio called Oyu Tolgoi “the world’s largest undeveloped copper-gold resource” when it agreed to buy 10 percent of Ivanhoe in October 2007. Copper has risen 10 percent in the past five years while gold has more than doubled. Read the rest of this entry »