Mongolian Govt. backs down, reaffirms Oyu Tolgoi investment agreement
In a joint statement issued Thursday, the Government of Mongolia, Ivanhoe Mines and Rio Tinto have all reaffirmed their continued support for the Oyu Tolgoi Investment Agreement. The Mongolian government backed off from its earlier demands that it wanted to increase its 34% stake in the massive Oyu Tolgoi copper gold project to 50%. Under the current agreement Mongolia can’t increase its ownership stake to 50% for 30 years. However, in the statement, the Mongolian government admitted, “Mongolia’s economy has become one of the fastest growing economies in the world. The people of Mongolia are reaping great benefit from the construction of Oyu Tolgoi project and stand to benefit even more when the project becomes operational.” Oyu Tolgoi is expected to generate almost one third of Mongolia’s national economic output.Mongolia, Ivanhoe and Rio Tinto declared, “The shareholders are united in their commitment to secure the necessary project finance and bring the Oyu Tolgoi Project to completion and full production for the benefit of the nation of Mongolia. All stakeholders: investors, lenders, employees, contractors, civil society and local communities can have full confidence in the future of Oyu Tolgoi.”
The 2009 Investment Agreement gave a 66% stake of the Oyu Tolgoi project to Ivanhoe and a 34% stake to the Mongolian government. Rio Tinto owns a 49% stake in Ivanhoe Mines.
On September 7, 20 members of Mongolia’s national parliament petitioned Mongolian Prime Minister Sukhbaatar Bathold to seek changes in the Oyu Tolgoi Investment Agreement prior to Mongolia’s general election in June 2012.
Ivanhoe and Rio Tinto both refused to reopen the Oyu Tolgoi agreement. Revisiting and/or making changes to the investment agreement requires the consent of all three parties.
The US$4.5 billion project is scheduled to begin commercial production of copper, gold and silver concentrate in the first half of 2013.
Oyu Tolgoi is expected to produce more than 1.2 billion pounds of copper and 650,000 ounces of gold annually in its first decade of operation.
The 2009 Investment Agreement gave a 66% stake of the Oyu Tolgoi project to Ivanhoe and a 34% stake to the Mongolian government. Rio Tinto owns a 49% stake in Ivanhoe Mines.
On September 7, 20 members of Mongolia’s national parliament petitioned Mongolian Prime Minister Sukhbaatar Bathold to seek changes in the Oyu Tolgoi Investment Agreement prior to Mongolia’s general election in June 2012.
Ivanhoe and Rio Tinto both refused to reopen the Oyu Tolgoi agreement. Revisiting and/or making changes to the investment agreement requires the consent of all three parties.
The US$4.5 billion project is scheduled to begin commercial production of copper, gold and silver concentrate in the first half of 2013.
Oyu Tolgoi is expected to produce more than 1.2 billion pounds of copper and 650,000 ounces of gold annually in its first decade of operation.
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