Sept.20 Press release: Oyu Tolgoi corrects the record
September 20, 2012
Ulaanbaatar, Mongolia - Some members of the Mongolian Parliament held a press conference on Wednesday, September 19 in connection with the approval of the Government Plan of Action for 2012-2016. The MPs claimed that “the investors will not pay VAT and export duty”. This statement does not align with the facts.
Oyu Tolgoi does not get any tax breaks or tax holidays. In 2011 alone, the Government of Mongolia received US$251 million in taxes from Oyu Tolgoi. Before Oyu Tolgoi earns its first Tugrugs the Government of Mongolia will have received US$700 million in tax revenues and prepayments.
The MPs claims maintained that “…although it is claimed that the Oyu Tolgoi project will yield 50 to 60 per cent benefit for the Mongolians, in reality the gain will not be greater than 30 per cent”.
The International Monetary Fund in its report 'The Fiscal Regime for Mining - A Way Forward' released in 2010, noted that Mongolia will receive up to 71 per cent of Oyu Tolgoi cash flow through taxes, dividends, royalties and fees. Indeed, under the Investment Agreement, the Mongolian Government would be receiving billions of dollars from the Oyu Tolgoi project even before the investors break even.
Should there be any confusion, we invite the people of Mongolia to read the Oyu Tolgoi Investment Agreement by visiting www.ot.mn/mn/about-us/investment-agreement.
About Oyu Tolgoi LLC (https://en.ot.mn/)
Oyu Tolgoi LLC is Mongolia's largest copper and gold mining company and is a strategic partnership between the Government of Mongolia (34 per cent stake), Turquoise Hill Resources (66 per cent) and Rio Tinto. Rio Tinto is the major shareholder in Turquoise Hill Resources and the manager of the Oyu Tolgoi project. In addition to dividends from its 34 per cent stake in Oyu Tolgoi, the Government of Mongolia will receive taxes and royalties.
Oyu Tolgoi, located in the Gobi desert in southern Mongolia, will be one of the largest and highest-grade copper and gold mines in the world. It is the largest project ever developed in Mongolia, requiring a capital investment for phase 1 of more than US$6 billion.
Oyu Tolgoi is committed to contributing to a sustainable future for Mongolia. At least 9 out of 10 employees will be Mongolian once the mine is in production and Oyu Tolgoi is investing US$58 million dollars (78 billion MNT) in training and education and an additional US$27 million dollars (36 billion MNT) in the Workforce Employment Project designed to help address the general skills shortage in Mongolia
Oyu Tolgoi's key priorities are the health and safety of employees, best-practice environmental management, contributing to sustainable communities and always doing business with integrity, for the benefit of all the project's shareholders and the people of Mongolia.
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