MPs' GROUP FAVORS 51% SHARE IN TAVAN TOLGOI, 34% IN OYU TOLGOI

The Government of Mongolia is likely to try to pin down a deal that will give it 34 percent ownership of the country's giant Oyu Tolgoi copper deposit as falling commodity prices push it to back away from seeking majority control. A parliamentary working group studying revisions to the country's minerals law has proposed that agreements for Oyu Tolgoi -- which is being developed by Ivanhoe Mines and Rio Tinto -- as well as for the big Tavan Tolgoi coal project be negotiated before the law is finalized.

"We had expected that first there would be a minerals law and then an investment agreement. But the new proposal is to proceed on an investment agreement before the new law," said Sodontogos, an advisor to the Mongolian National Mining Association. Parliament may consider that suggestion as early as December1, she said.

The proposal would include a recommendation for the state to hold 34 percent in Oyu Tolgoi and 51 percent in Tavan Tolgoi, Mongolian media have said and sources close to the working group have confirmed. The group was scheduled to release its recommendations on November 15, but has not done so, due to splits within the group over the proper role of the state and the best way for Mongolia to realize wealth from its mineral deposits.

The Government is unlikely to invest any money on developing either project. Its proportionate share of such expenses will be adjusted against taxes, royalty and other fees, dividends and advances. An emphasis in both projects will be on processing the raw extraction. Development of infrastructure, water and energy supply, and urban planning will be a formal part of the agreements. Facilities for training workers will also have to be installed.

Source: Reuters.com, en.News.mn

MPs' GROUP FAVORS 51% SHARE IN TAVAN TOLGOI, 34% IN OYU TOLGOI

The Government of Mongolia is likely to try to pin down a deal that will give it 34 percent ownership of the country's giant Oyu Tolgoi copper deposit as falling commodity prices push it to back away from seeking majority control. A parliamentary working group studying revisions to the country's minerals law has proposed that agreements for Oyu Tolgoi -- which is being developed by Ivanhoe Mines and Rio Tinto -- as well as for the big Tavan Tolgoi coal project be negotiated before the law is finalized.

"We had expected that first there would be a minerals law and then an investment agreement. But the new proposal is to proceed on an investment agreement before the new law," said Sodontogos, an advisor to the Mongolian National Mining Association. Parliament may consider that suggestion as early as December1, she said.

The proposal would include a recommendation for the state to hold 34 percent in Oyu Tolgoi and 51 percent in Tavan Tolgoi, Mongolian media have said and sources close to the working group have confirmed. The group was scheduled to release its recommendations on November 15, but has not done so, due to splits within the group over the proper role of the state and the best way for Mongolia to realize wealth from its mineral deposits.

The Government is unlikely to invest any money on developing either project. Its proportionate share of such expenses will be adjusted against taxes, royalty and other fees, dividends and advances. An emphasis in both projects will be on processing the raw extraction. Development of infrastructure, water and energy supply, and urban planning will be a formal part of the agreements. Facilities for training workers will also have to be installed.

Source: Reuters.com, en.News.mn