Archive for the ‘Mining’ Category
The Ouy Tolgoi Investment Agreement was officially signed on the auspicious day of October 6, 2009. The ceremony was broadcast live throughout Mongolia on Mongolian television and can be seen here:
The stars finally aligned on October 6, 2009 as senior members of the Mongolian Government hosted senior officials from Ivanhoe Mines Mongolia Inc and Rio Tinto International Holdings. October 6 was chosen as the signing day because according to Buddhist lams it is an auspicious day on the Buddhist calendar.
The Oyu Tolgoi site (Turquoise Hill in English) is predicted to be one of the largest reserves of gold and copper in the world, with an estimated mine life of 40 years. It is also the largest development project and foreign investment in the history of the country.
On a related note, it has been reported that one of the signers of the investment agreement, Mineral Resources and Energy Minister D. Zorigt, yesterday won the by-election for the Parliament seat left vacated by the current Mongolian President Ts. Elbegdorj, who was elected in June of this year.
After continued negotiations for the better part of the decade the Oyu Tolgoi Investment Agreement has finally been signed by the Government of Mongolia, Rio Tinto and Ivanhoe Mines Mongolia.
There have been numerous false starts to finalizing the OT agreement this summer. It was rumored that it would be signed before the Naadam national holiday held each summer on July 11-13. An Extraordinary Session of Parliament was held in late August which modified or repealed several laws that paved the way for the signing of the Agreement followed by report that it would be signed by the end of September. Well, September came and went with no movement.
The stars finally aligned, literally and figuratively, yesterday, October 6, 2009 as senior members of the Mongolian Government hosted senior officials from Ivanhoe Mines Mongolia Inc and Rio Tinto International Holdings. October 6 was chosen as the signing day because according to Buddhist lams it is an auspicious day on the Buddhist calendar.
One can only guess what conditions would currently be in Mongolia if the agreement had been signed five years ago and Mongolia had been able to take advantage of the commodity boom. Hopefully the long wait will be worth it with great changes to both the country and the people of Mongolia hopefully being realized.
I am personally very excited to see what this means for Mongolia’s business community. With an estimated $30 billion to be generated in tax revenues over 50 years Mongolia is in an enviable position to be financially able to drastically improve the lives of the Mongolian people. To that effect, Mongolia is setting up a sovereign wealth fund that will be run by professional managers, according to Bloomberg. The aim of the fund is to disburse a part of the profits from mine sites to everyone in Mongolia, either through cash or non-cash means.
ULAANBAATAR, MONGOLIA – Along with the sounds of groaning children, school bells and homework assignments being handed out on this traditional first day of school in Mongolia, there can also be heard a quiet sigh of relief due to reports of the imminent signing of the Oyu Tolgoi (OT) Investment Agreement.
An unnamed government minister has said in The UB Post newspaper that he expects the Oyu Tolgoi agreement to be signed within two week’s time by both sides. While we have all heard this time and again during the past five years of negotiations, it looks like these words may actually come to fruition this time. In the past the Investment Agreement has sought to alter current laws in order to make the agreement more favorable to one side or the other. The current incarnation of the agreement complies with all current Mongolian Laws, thus making it much more likely to be accepted by the Government. Read the rest of this entry »
The basic framework for the Oyu Tolgoi Investment Agreement is now much closer to being finalized after the Government of Mongolia agreed to pass amendments to four laws, including the repeal of the controversial Windfall Profits tax, the Corporate Income Tax Law, the Water Use Law and the Road Law.
Following is the transcript of the Power Point presentation that we have posted on SlideShare. Please note, this is for informational purposes only and may not be the final version signed.
Oyu Tolgoi Investment Agreement presentation slideshow:
Wednesday, August 26, 2009
According the today’s edition of The Mongol Messenger, an English-language newspaper in Mongolia, and several other sources amendments to four laws were approved yesterday by the Mongolian Ikh Khural, or Parliamnet, in a bid to increase the likelihood of the Oyu Tolgoi Investment Agreement’s passing. An extraordinary session of Parliament was convened last Wednesday, August 19, in order to discuss these possible changes to Mongolian law.
August 13, 2009
There has been an update in the Mongolian media on the latest in the on-going saga that is the Oyu Tolgoi Investment Agreement.
According to news outlets in Mongolia the Cabinet and National Security Council have approved the latest changes that have been forged during the last round of negotiations. These include:
- Project investment reduced to US4 billion from a previous US5 billion;
- Mongolia’s investment for its 34% shares will be US816 million, half the amount of previous discussions;
- There will be a prepayment loan to the Government of Mongolia in the amount of US250 million, with 5% annual interest rate, which is a lower interest rate than in previous negotiations; and
- No exemption from Customs Tax or refund of VAT already paid by the companies. Read the rest of this entry »
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.