Archive for July, 2009

Oyu Tolgoi Finally Moving Forward?

July 27, 2009  Ulaanbaatar, Mongolia

Government Given the Go-ahead to Negotiate

The current business environment in Mongolia is very exciting; in no small part due to recent developments in the Rio Tinto/Ivanhoe Mines negotiations.    After over five years of negotiating the Oyu Tolgoi (OT) Investment Agreement with Mongolian officials, the Parliament last week (July 16) passed a resolution giving the Government the right to conclude the Investment Agreement.  This marks the furthest the negotiations have reached since they began.  While obstacles remain, most notably the 68% Windfall Profits tax on gold and copper, most remain quietly optimistic the Investment Agreement is on the verge of moving forward.  Finally!

The OT site is located in the South Gobi region of Mongolia, 80 km north of the Mongolian-Chinese border.   It is claimed by investors to be the largest copper-gold development project in the world, with an estimated 35 year life-span with yield estimates of 440,000 tons of copper and 320,000 ounces of gold.  The over USD7 billion that will be invested over the life of the mine makes it one of the largest, if not the largest, development projects in Mongolian history.

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