Mongolian lawmakers demand revision of large mining deal

ULAN BATOR, Sept. 7 (Xinhua) -- A group of 20 Mongolian lawmakers has demanded that the government revise an investment deal signed with two foreign mining firms in 2009, local media reported Wednesday.
Lawmakers from both the ruling Mongolian People's Party and Mongolian Democratic Party demanded the government increase Mongolia's stake in the investment agreement made with Canadian mining company Ivanhoe Mines and global mining giant Rio Tinto on Oct. 6, 2009.
They also demanded a higher tax on the mining companies, adding that the government needs to get the deal revised by Oct. 1.
The government currently owns a 34-percent stake in the giant mining project and lawmakers expect it to be raised to 50 percent once investors recoup initial investment costs.
According to its website, the Oyu Tolgoi project requires more than five billion U.S. dollars and production is expected to start in late 2012.
Lawmaker Davaajav Gankhuyag said "in the investment agreement with miners, the price of copper is set at 4,320 U.S. dollars per ton. Today the price of copper is around 8,000 dollars. It may reach 9,000 dollars soon. At this rate, investors can recoup the initial investment cost within two years."
According to the original agreement, Mongolia would provide a stable tax and legal environment for investors and not revise the agreement.
The Oyu Tolgoi mine contains one of the world's biggest copper-gold deposits. According to a preliminary exploration, the mine contains more than 31 million tons of copper, some 1,328 tons of gold and about 7,000 tons of silver.

Source:Xinhua news service


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