Mongolia Wants Stake Increased in Oyu Tolgoi Copper-Gold Mine Project
The Mongolian government wants to enlarge its share in the Oyu Tolgoi copper-gold project to 50% from 34%, even though it is still not within the contract’s allowed provision.
The government’s plan, which it stated in a proposal sent to the copper-gold project consortium, the Rio Tinto Group and Ivanhoe Mines Ltd., is making the investors rethink its investment plans in Mongolia.
“We have sent the proposal to Ivanhoe to renegotiate the timeframe for us to increase the government stake,” Mongolia’s Mining minister Dashdorj Zorigt told reporters at Oyu Tolgoi on Saturday.
Mongolia is allowed to increase its hold in the project. However, this can only happen 30 years from the agreement’s effective date, which was signed in 2009.
Some members of Mongolia’s parliament called for the re-examination of the Oyu Tolgoi investment following trends that metals, especially copper, will continue to rise regardless of a downfall in the commodity’s price index amid the global financial meltdown.
Aside from increased claims, they would want to imposed royalties and higher taxes on mining companies which could derail their resource projects.
But analysts noted investors would be turned off because of contract violation, thus damaging investor perception.
The project is 66 percent owned by Ivanhoe Mines Ltd. and is only half way through completion. Ivanhoe is 48.5-percent owned by Rio Tinto.
The Oyu Tolgoi copper-gold mine is to become one of the world’s five biggest copper mines. It is expected to produce an average of 450,000 tonnes of copper and 330,000 ounces of gold per year over the next 10 years.
It is projected to account for one-third of total Mongolian GDP by 2020.
Ivanhoe Mines Ltd. spent more than six years negotiating with Mongolia before an agreement was signed. The site is expected to open in 2013.
The government’s plan, which it stated in a proposal sent to the copper-gold project consortium, the Rio Tinto Group and Ivanhoe Mines Ltd., is making the investors rethink its investment plans in Mongolia.
“We have sent the proposal to Ivanhoe to renegotiate the timeframe for us to increase the government stake,” Mongolia’s Mining minister Dashdorj Zorigt told reporters at Oyu Tolgoi on Saturday.
Mongolia is allowed to increase its hold in the project. However, this can only happen 30 years from the agreement’s effective date, which was signed in 2009.
Some members of Mongolia’s parliament called for the re-examination of the Oyu Tolgoi investment following trends that metals, especially copper, will continue to rise regardless of a downfall in the commodity’s price index amid the global financial meltdown.
Aside from increased claims, they would want to imposed royalties and higher taxes on mining companies which could derail their resource projects.
But analysts noted investors would be turned off because of contract violation, thus damaging investor perception.
The project is 66 percent owned by Ivanhoe Mines Ltd. and is only half way through completion. Ivanhoe is 48.5-percent owned by Rio Tinto.
The Oyu Tolgoi copper-gold mine is to become one of the world’s five biggest copper mines. It is expected to produce an average of 450,000 tonnes of copper and 330,000 ounces of gold per year over the next 10 years.
It is projected to account for one-third of total Mongolian GDP by 2020.
Ivanhoe Mines Ltd. spent more than six years negotiating with Mongolia before an agreement was signed. The site is expected to open in 2013.
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