Mongolian Parliament responded to the letter of the Ivanhoe Mines and Rio Tinto companies and now asks the companies to apologize

The letter sent by the international miners to Mongolian Parliament or State Great Khural backfired and now the companies are asked to apologize.On July 27, the international miners Rio Tinto and Invanhoe Mines sent letter to the members of the Mongolian parliament-State Great Khural.The letter emphasized importance of passing the Oyu Tolgoi investment agreement and its economic benefit for Mongolia and requested meeting with the legislators for clarification of the draft investment agreement. The letter said " Mongolia is at a crossroad today. One way is to attract foreign investment and develop world class mining sector and strengthen Mongolia's independence and economy and other way is to restrict Mongolia's economy and investors and donors leave Mongolia and increase Mongolia's dependence from its neighbors (China and Russia).

Last friday (Aug 7), office of the State Great Khural responded the miners. The response letter was broadcast and aired on National TV and other Mongolian media.
The Khural regretted that some points of the letter casts doubts about credibility of the miners. The response said" we see this as an external attempt to direct Mongolian development and independence of Mongolia. This demonstrates that your companies lack political and business culture when you shamelessly attempt to pressure members of the State Great Khural". Not only the Khural, but some civic groups are critical of the letter sent by the miners as well. However, Khural said the miners now have opportunity to exchange opinions on Oyu Tolgoi with Government of Mongolia as it is authorized by the Khural to conclude agreement. Khural letter also reminded the miners that Mongolia has chosen democracy and free market economy about twenty years ago and recognized by world community as democracy in response to " Mongolia at a crossroad today"rhetoric of the miners letter.The letter continues " we want to remind you that Mongolia does not need a company to determine its development and Mongolian people and Mongolian state have a right to determine our fate without external attempts and instructions.We don't believe this letter that attempts to pressure Mongolian state as official position of top management of Rio Tinto and Ivanhoe Mines companies." The Khural considers the companies ought to apologize for "making such rude attempt from the members of the Khural."

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2 comments:

  1. OK, here is the apology, we are sorry for saying that Mongolia does not know how to run your own country, neither do we (i.e Canada or the US) - look at our economies.....

    But the net of all of this is we both need each other (Mongolia's vast resources and Rio/Ivanhoe's ability to explore, raise capital, build mines and operate them). Governments do not know how to do any of that.

    So here's a simple solution, select the best in class tax/mining model in the globe, add 1-2 points so that the Great Khural can answer to their people and let's start building the world's biggest copper mine together.

    This can be a Win-win situation for everyone, investors, Mongolia people and the govt.

    Scrap the windfall tax!!! no one else in the world has that.

    ReplyDelete
  2. Hey downtowntanman, I understand where you're coming from. I'm an American in Mongolia, not affiliated with any mining interests or global corporations. We understand the opportunity. Let's put this in perspective. IVN came to MGL saying they discovered the mine, even though they weren't in MGL. It's like if we live on the same street, and you're a miner and tell me there's gold under my backyard because you have some sensor. If I'm the owner of the yard, I may be grateful, but 1) I may not want to dig up the yard, because its beautiful and I live there, and 2) its *private property*, so while I might be grateful to know its there, we should realize that "I" have the right to do with it what "I" want. I mean if I live in a neighborhood, I can say, "Let me paint your house yellow. It looks good yellow." That's all fine and good, but most people I told that to would take care of it as they saw fit.

    If we say IVN spent a lot of effort and investment, MGL didn't really make any promises as far as I know. Maybe IVN's assumptions were not good in the first place, that if they spend a lot of money trying to find what's there, that MGL is obligated to let them have access. Don't be surprised if after IVN is out that they give the mine to a Chinese company in a month, because MGL wants to keep a good relationship with China.

    Short IVN now, and move to Mongolia. There are under 3 million people in Mongolia. Even if the government is intaking all the money and they all each buy a fleet of SUVs and live in the fanciest apartments in UB, look at the math. If there is 1000 tons of gold (35.2 million ounces), that's a $35.2 billion resource just in gold. There are extraction costs, but right there you have $13,538/person. Even if the government members all kept it all, I believe they're going to spend a good amount in the local market. Western politicians don't have resources and are just solving problems printing money. Jim Rogers moved to Asia.

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