Mongolia eases restrictions on foreign investors

* New law aims to revive foreign investment
* Analysts say is step in right direction, but more to be done
* Mongolia's growth closely tied to its vast copper, coal resources
By Terrence Edwards
ULAN BATOR, Oct 4 (Reuters) - Mongolia has passed a law aimed at reviving foreign investment by easing restrictions on investors in key sectors such as mining and by providing greater certainty on the taxes they must pay.
The new regulations take effect on Nov 1 and replace two previous laws, including one that imposed restrictions on foreign investments in strategic sectors after state-owned Aluminum Corp of China (Chalco) made a bid to take control of Mongolia-focused coal miner SouthGobi Resources in 2012.
Investors and analysts said the new law was a step in the right direction following more than a year of uncertainty over investment rules, which many blamed for a slump of 43 percent in overseas investment in the first half of 2013, on an annual basis.
Economic growth in the sparsely populated and landlocked country is heavily tied to its vast copper and coal resources, and reinvigorating foreign investment has been a top priority for its government.
"Without a doubt, it is a very positive development," said Sam Spring, chief executive of Mongolia explorer Kincora Copper .
Under the new law, which had been on the cards for a few months, private companies will no longer need government approval to invest in the so-called strategic areas of mining, telecommunications and banking. Although firms that are at least 50 percent state-owned will still need the go-ahead from a new agency.
The law also gives investors five to 22 years of "stability" on value added tax, corporate income tax, mining royalties and customs duties. That means they will pay tax rates that apply when an investment is made for those periods.
The new investment law protects investors from expropriation, allows profits to be taken out of the country, and reaffirms the right to arbitration, Sereeter Javkhlanbaatar, head of foreign investment regulation and registration in the economic development ministry told Reuters.
While the new investment law marks a step forward, Independent Mongolian Metals & Mining Research analyst Dale Choi said three key issues - the fate of an underground expansion at Rio Tinto's Oyu Tolgoi copper mine, uncertainty over 106 mining licences, and revisions to a rivers and forests law - still need to be resolved to restore foreign investor confidence.
Centerra Gold needs revisions to the rivers and forests law in order to go ahead with its Gatsuurt project, which has been on hold since 2010.
Kincora Copper is among an estimated 11 foreign companies and 67 Mongolia groups affected by uncertainty over the status of mining licences.

Source:Reuters
Share:

0 comments:

Post a Comment

Facebook page

Powered by Blogger.

Categories

Advertising in Mongolia An Asian Development Bank Culture Editorial of the Mongolianviews education Environmental protection Famous Mongolians Foreigners in Mongolia Inner Mongolia Ivanhoe Mines Mongolia Adventure Mongolia agriculture Mongolia air pollution Mongolia analysis Mongolia and Armenia Mongolia and Asian Development Bank Mongolia and Australia Mongolia and Azerbaijan Mongolia and Belorussia Mongolia and Bulgaria Mongolia and Cambodia Mongolia and Canada Mongolia and central Asia Mongolia and China Mongolia and Cuba Mongolia and Czech Mongolia and donors Mongolia and EU Mongolia and Germany Mongolia and Hongkong Mongolia and Hungary Mongolia and IFC Mongolia and IMF Mongolia and Ind Mongolia and India Mongolia and Indonesia Mongolia and Inner Mongolia Mongolia and Iran Mongolia and Israel Mongolia and Italy Mongolia and Japan Mongolia and Kazakhstan Mongolia and Korea Mongolia and Kuwait Mongolia and Kyrgyzstan Mongolia and Malaysia Mongolia and Nato Mongolia and North Korean Mongolia and Poland Mongolia and Qatar Mongolia and Russia Mongolia and Russia and Mongolia and China Mongolia and Singapore Mongolia and South Korea Mongolia and Taiwan Mongolia and Thailand Mongolia and the world Mongolia and Tibet Mongolia and Turkey Mongolia and UK Mongolia and Ukraine Mongolia and UN Mongolia and US Mongolia and USA Mongolia and Vietnam Mongolia Banking Mongolia blind Mongolia Cashmere Mongolia Christianity Mongolia civic society Mongolia Corruption Mongolia crime Mongolia diplomacy Mongolia Economy Mongolia Education Mongolia Energy Mongolia environment Mongolia Finance Mongolia Health Mongolia History Mongolia holiday Mongolia in international media Mongolia Industries Mongolia investment Mongolia Joke Mongolia law Mongolia LGBT Mongolia medical Mongolia military Mongolia Mining Mongolia Mining Developments Mongolia Mortgage Mongolia natural disaster Mongolia news media Mongolia Nuclear Mongolia Petroleum Mongolia Politics Mongolia Poverty Mongolia public announcements Mongolia railways Mongolia Religion Mongolia slums Mongolia society Mongolia Sports Mongolia Stamp Mongolia Sumo Mongolia telecommunication Mongolia tourism Mongolia trade Mongolia Transportation Mongolia Urbanization Mongolia Wild Life Mongolian Agriculture Mongolian and Cuba Mongolian Archeology Mongolian Climate Mongolian Food Mongolian Gay Mongolian Government news Mongolian History Mongolian Kazakh Mongolian Meat Mongolian Military Mongolian Mining Development Mongolian Movie Mongolian News Mongolian Parliament Mongolian Political news Mongolian Press Mongolian Songs Mongolian Sumo Mongolian Women Mongolian Youth Mongolians abroad Moninfo Opinion Oyu Tolgoi Investment Agreement Photo news Press Release Rio Tinto Tavan Tolgoi coal mine Ulaanbaatar development Weird expatriates in Mongolia World bank and Mongolia

Blog Archive

Followers