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Thursday February 15, 9:11 PM
Mongolia president seeks bigger state share of mines
ULAN BATOR, Feb 15 (Reuters) - Mongolia's president has proposed the state take a greater share of minerals resources, exceeding previous goals even as the government negotiates with Ivanhoe Mines Ltd. over what could be the world's largest copper deposit.
The state could own more than 34 percent of mineral deposits found privately, and not less than 50 percent of those discovered with state funds, according to recommendations made this week at a consultative meeting on Mongolia's mineral resources chaired by President N. Enkhbayar.
Mongolia's current laws, passed in July 2006, allow the state to take up to 34 percent of privately discovered deposits and up to 50 percent of strategic deposits discovered with state funds.
Officials had said the state would ask for the maximum government share in negotiations with Ivanhoe over its Oyu Tolgoi copper and gold project.
Ivanhoe and partner Rio Tinto Plc are in talks to set tax and other terms for Oyu Tolgoi, in the South Gobi desert.
Recommendations from the meeting would be taken into consideration by the government working group negotiating with Ivanhoe and Rio Tinto, said Ts. Davaadorj, director of the geology, mining and heavy industry department at the ministry of industry and trade. A Man A Woman
A Man A Woman
Any amendments to the current minerals law would wait until parliment reconvenes in the spring.
While an Ivanhoe official attended the meeting, he could not be reached for comment afterwards.
Mongolia has been reasserting state control over the mineral sector since the Mongolian People's Revolutionary Party, which governed the landlocked country for most of the 20th century, returned to power in January of last year.
The 2006 minerals law and a windfall profits law cooled investment interest from junior miners, many of whom had flocked to Mongolia to partake of very liberal investment laws passed in the 1990s.
"These proposals will only delay the negotiation process," said civic movement leader S. Ganbaatar, who also attended the meeting.
"We need to start these projects as soon as possible so the public can benefit. We can't wait two more years."
The government has yet to indicate how it would fund its stake in the Oyu Tolgoi project, or in the mammoth Tavan Tolgoi coal project also in the Gobi Desert.
"The next step is to discuss how we [the Mongolian government] can make direct or indirect investments in these projects; this is the key issue," Davaadorj said.
The meeting also proposed hiring independent international experts and finance institutions to advise on developing mineral resources. It suggested the stock market to raise funds for projects, improving the tax structure for minerals and improving environmental rehabilitation, according to documents provided by the president's office.
COMMENT: It really is unbelievable what SOBs the Mongols are. I hope Ivanhoe is considering "mining" the site so that if the Mongols decided to nationalize it, they would be unable to get near the site for fear of blowing themselves to pieces.