Mongolia leader wants to change mining deal
Mongolia’s president-elect wants to change a proposed gold and copper mining agreement with Rio Tinto (RIO.AX) (RIO.L) and Ivanhoe Mines (IVN.TO), according to a report on Wednesday.
President-elect Tsakhia Elbegdorj is not in favor of the Mongolian government buying a 34 percent equity stake in the Oyu Tolgoi gold-copper project in Mongolia, Bloomberg News reported on its website.He would rather see the government taking 50 percent of the profits from the project, according to the article, based on interview with the president-elect.
Ivanhoe has been trying for more than five years to complete an investment agreement with Mongolia to develop the Oyu Tolgoi deposit, located about 80 kilometers north of the border with China.
Rio Tinto holds a 10 percent stake in Ivanhoe and can increase its stake to more than 40 percent by meeting funding objectives.
Vancouver-based Ivanhoe in March 2008 estimated the copper resources in the project at 78.9 billion pounds and the gold resources at 45.2 million ounces.
“I am not in favor of that,” Elbegdorj said in an interview from the Mongolian capital of Ulan Bator. “I think an equity share is not a good proposal.”
Elbegdorj defeated incumbent Nambaryn Enkhbayar in the May 24 presidential election, and will be sworn in Thursday.
Oyu Tolgoi is expected to produce an average of at least 440,000 tonnes of copper and 320,000 ounces of gold a year over a 35-year mine life.
Ivanhoe shares fell 11 cents to C$6.77 Wednesday on the Toronto Stock Exchange. (Reporting by Euan Rocha; Editing by Frank McGurty)