Calls for secure investment climate

By Staff reporter / May 23, 2018 / www.mining-journal.com / Article Link

He said it was critical there was a safe and secure climate for investment, adherence to the rule of law and a clear signal to the world about the value of doing business in Mongolia. His speech comes after Mongolia's anti-corruption agency has made several high-profile arrests over an investigation into suspected misuse of power by officials during negotiations linked to Oyu Tolgoi contracts, Reuters reported.  Investigators had not said the mine operator Rio had done anything wrong and some analysts believed the allegations were politically motivated, the wire service said. Oyu Tolgoi has faced a series of hurdles in Mongolia so far this year. It declared force majeure over customer contracts for six weeks from mid-January due to protests near the Chinese border, is in a multi-million dollar tax dispute and has been forced to find an alternative long-term power supply after the government cancelled an agreement in February.  "Protecting agreements and honouring contracts is critical - particularly in mining where time horizons are long and upfront investment is massive," Soirat said. "At OT, we rely on the sanctity of the key investment agreements which serve as the foundation of the shareholders' potential US$12 billion investment in Mongolia." He said the agreements ensured the government would receive more than 50% of the economic benefits over the life of the project. Oyu Tolgoi is jointly owned by the government (34%) and Turquoise Hill Resources (66%), which is 51%-owned by Rio Tinto. It is expected to be the world's third-largest copper mine at peak metal production in 2025, producing an average 550,000 tonnes of copper and more than 450,000 ounces of gold annually between 2025-2030. Soirat's comments follow CEO J-S Jacques' speech to a US conference last week where he said resource nationalism was an issue gaining momentum and affecting miners around the world. 

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