Mongolian ministers assigned to renegotiate foreign mining deal

ULAN BATOR, Sept. 22 (Xinhua) -- The Mongolian Cabinet Office would ask Canadian and Australian mining companies to renegotiate the Oyu Tolgoi copper-gold mining agreement, local media reported Thursday.
Chimed Khurelbaatar, chief of the Cabinet Office of Mongolia, was assigned to approach mining giants Ivanhoe Mines of Canada and Rio Tinto of Australia to discuss increasing Mongolia's stake from the 34 percent prescribed in the 2009 joint investment agreement.
A working group comprised of Minerals Minister Dashdorj Zorigt and Finance Minister Sangajav Bayartsogt was appointed by the government to take charge of the renegotiation during a cabinet meeting held Wednesday.
Twenty lawmakers submitted a letter to Prime Minister Sukhbaatar Batbold on Sept. 7, demanding a revision of the agreement to increase the government stake to 50 percent and impose a higher royalty tax.
The mining project, which employs about 10,000 Mongolians and is training 3,000 more, was being implemented well, Zorigt said, adding the 50 percent completion of the mine would be celebrated on Sept. 25.
"The impact of this large project on the Mongolian economy is enormous and very positive. Based on this, we are assigned to renegotiate in order to increase Mongolian ownership to 50 percent," he said.
Ivanhoe Mines owns 66 percent of the project and Rio Tinto, which manages its development, owns 48.5 percent of Ivanhoe.
The government's 34 percent stake in the mine has been the focus of heated public debates. Many consider Mongolia should own more than 50 percent.
However, Oyu Tolgoi CEO Cameron McRae of Rio Tinto said in a statement Monday the Mongolian government benefited a lot from the project, including gaining more than 50 percent of cashflow.
According to a preliminary exploration, the Oyu Tolgoi mine contains more than 31 million tons of copper, 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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