Mongolia to review giant mine joint venture agreement: finance minister

ULAN BATOR, Sept. 20 (Xinhua) -- The Mongolian government would seek to revise an investment agreement with Canadian and Australian mining companies to increase the country's stake, Finance Minister Sangajav Bayartsogt told local media Tuesday.
The move came after 20 lawmakers submitted a letter to Prime Minister Sukhbaatar Batbold on Sept. 7, demanding the 2009 Oyu Tolgoi joint venture agreement with mining giants Ivanhoe Mines of Canada and Rio Tinto of Australia be revised for the nation's benefits.
They demanded higher taxes on the two mining companies and an increase in Mongolia's stake to 50 percent from the current 34 percent.
The lawmakers also proposed to cut the time limit, currently 30 years, before Mongolia can increase its ownership to a minimum of 50 percent once the project recoups initial investment.
Ivanhoe Mines owns a 66 percent stake in the joint venture.
"We will study when the investors might recoup the initial investment through reviewing the company's financial reports and analysis and then discuss with them about the revision, which would be finalized once both sides reached a consensus," Bayartsogt said.
"According to the agreement, taxation is stabilized. Therefore, we can not impose a higher royalty tax," he said.
However, many critics feared the revision might discourage foreign investments in Mongolia.
According to a preliminary exploration, the Oyu Tolgoi mine contains more than 31 million tons of copper, some 1,328 tons of gold and about 7,000 tons of silver, and is regarded as one of the world's biggest copper-gold deposits.

Source:Xinhua news service
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