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| Big money changing hands at Mongolia’s foreign ministry |
Pursuant to the 2nd annex of parliamentary resolution #40 dated December 12, 2008, approving the basic principle and directive to establish an Investment Agreement to co-exploit Oyu Tolgoi copper-gold deposit, the government was given a duty to negotiate receiving a certain part of royalty and taxation as an advance payment.
Accordingly, the Investment Agreement was established on October 6, 2009 between the Government of Mongolia and Rio Tinto International Holdings Limited, Ivanhoe Mines Limited Corporation and Ivanhoe Mines Mongolia Inc., and it was agreed that the Mongolia side would receive an advance payment worth USD250 million through certain phases.
Advance payments were received in phases. Mongolia’s government received the first part of the advance payment of USD100 million in October, 2009 from the investor and the second part worth USD50 million on April 7, 2010.
Based on parliamentary resolution # 40 in 2008, the Finance Minister was authorized to build an agreement on receiving a certain part of the royalty and taxation of the Oyu Tolgoi Company according to government resolution # 164 ‘Giving authority to establish an agreement’ was approved on May 25, 2011. It has the purpose to regulate relations regarding the remainder of the advance payment.
On June 7, a signing ceremony in accordance with the agreement was held at the Finance Ministry. Finance Minister S. Bayartsogt and Oyu Tolgoi Company President and CEO Cameron McRae concluded the agreement.
As the agreement was signed, the last installment worth USD100 million of the advance payment was transferred to the Mongolian side. The installment carries an interest rate of 1.59 percent.
source: 'The Mongol Messenger' newspaper
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