Canadian miner says Mongolia could beat Australia on coal export industry
Australia's coal producers are facing stiff competition from Mongolia and Canadian mining magnate Robert Friedland is predicting that the country could eventually lose a sizeable share of its global market from Mongolia's lower tax measures for its resource industry.
he billionaire head of Toronto-based Ivanhoe Mines Ltd and its local subsidiary, Ivanhoe Australia Ltd, said on Wednesday that there is a strong possibility that Mongolia could wipe out the Australian coal industry due to its lower mining tax.
Mr Friedland's Ivanhoe Mines maintains a 79 percent interest in Mongolia's South Gobi Energy Resources Ltd, which is currently the country's largest producer and exporter of coal.
He told delegates gathered at Diggers and Dealers conference in Kalgoorlie, Western Australia that Mongolia enjoys a major advantage over Australia as the former's tax on mining profits was only 25 percent as against the latter's proposed 30 percent minerals resource rent tax.
And that advantage is further bolstered by Mongolia's proximity to China, giving it an almost direct access to Chinese customers, which comprise the biggest chunk of Australia's major trading partners in terms of coal export shipments.
Mr Friedland also noted that Mongolia is poised to reap tons of benefits from the Oyu Tolgai gold and copper mining site, a joint venture of Ivanhoe Mines with Rio Tinto Ltd and believed to hold reserves that reach some $US1 trillion or $A1.1 trillion worth of ore.
With such promising projections, he said that the mining site is well on its way to become one of the world's top three copper gold producers with mining life expectancy of at least 59 years, or even 100 years as estimated by Rio Tinto.
The Oyu Tolgai mining site is 34 percent-owned by the Mongolian government and is scheduled to commence initial production by 2013 as Mr Friedland said that based on the latest metal prices, the mining operation carries an after-tax net present value of $US16 billion.
he billionaire head of Toronto-based Ivanhoe Mines Ltd and its local subsidiary, Ivanhoe Australia Ltd, said on Wednesday that there is a strong possibility that Mongolia could wipe out the Australian coal industry due to its lower mining tax.
Mr Friedland's Ivanhoe Mines maintains a 79 percent interest in Mongolia's South Gobi Energy Resources Ltd, which is currently the country's largest producer and exporter of coal.
He told delegates gathered at Diggers and Dealers conference in Kalgoorlie, Western Australia that Mongolia enjoys a major advantage over Australia as the former's tax on mining profits was only 25 percent as against the latter's proposed 30 percent minerals resource rent tax.
And that advantage is further bolstered by Mongolia's proximity to China, giving it an almost direct access to Chinese customers, which comprise the biggest chunk of Australia's major trading partners in terms of coal export shipments.
Mr Friedland also noted that Mongolia is poised to reap tons of benefits from the Oyu Tolgai gold and copper mining site, a joint venture of Ivanhoe Mines with Rio Tinto Ltd and believed to hold reserves that reach some $US1 trillion or $A1.1 trillion worth of ore.
With such promising projections, he said that the mining site is well on its way to become one of the world's top three copper gold producers with mining life expectancy of at least 59 years, or even 100 years as estimated by Rio Tinto.
The Oyu Tolgai mining site is 34 percent-owned by the Mongolian government and is scheduled to commence initial production by 2013 as Mr Friedland said that based on the latest metal prices, the mining operation carries an after-tax net present value of $US16 billion.
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