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Mongolia – Parliament Backs Solution To Copper Mine Impasse.

24 February, 2015

 

Legal News & Analysis – Asia Pacific – Mongolia – Energy & Project Finance

 

The Mongolian parliament has backed a plan to resolve the long-running dispute over the Oyu Tolgoi copper mine.

 

Mongolia’s new prime minister, Chimed Saikhanbileg, put a proposal to Parliament this week, saying that the government would work to “resolve underground investment issues” and boost development by the end of this year, Mining Weekly reports.

 

Saikhanbileg is keen to boost foreign investment in mining to boost Mongolia’s economy, which has seen a fall in coal prices and export figures and is suffering from uncertainty over the government’s policies on mining, Mining Weekly said.

 

The Mongolian government owns 34% of the USD 5.4bn (GBP 3.5bn) Oyu Tolgoi copper mine, while mining giant Rio Tinto’s Turquoise Hill Resources division owns the rest. Rio Tinto has put development of the mine on hold since 2013 because of disputes with the Mongolian government about cost overruns.

 

Mining ministry spokesman Galsan Bodibilguun said the government is looking for a buyer for its stake, and will take royalties in return. Rio Tinto has said it is not interested in increasing its own share, so the government will need to find an interested third party, Mining Weekly said.

 

Prime minister Saikhanbileg recently held a referendum by text message, asking Mongolians whether they wanted him to press ahead with major projects like Oyu Tolgoi or impose more austerity. Out of 302,008 votes, 56.1% supported further development, including Oyu Tolgoi, while 43.9% were in favour of “strengthening economic discipline”.

 

Pinsent Masons

 

For further information, please contact:

 

Richard Laudy, Partner, Pinsent Masons

richard.laudy@pinsentmasons.com

 

Nick Ogden, Partner, Pinsent Masons

nick.ogden@pinsentmasons.com

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