New Draft Mining Law to be Introduced Mongolia Introducing New Investment Law to Attract Investors Deputy Minister 04/17 08:43 AM
LONDON--The Mongolian government plans to submit a new investment law for parliamentary approval by this summer that aims to give foreign investors more assurance about the rules governing their investments, Mongolia's deputy minister of economic development said Wednesday.
"We want to send a very strong message [regarding] the stability and in the clarity of treatment of foreign investors in Mongolia," Chuluunbat Ochirbat told journalists on the sidelines of the Mongolia Investor Summit here.
He said the government has already drafted the law and plans to hold a cabinet-level discussion over the next couple of weeks with a view to submitting it to parliament for approval before the spring plenary session closes on July 10.
The draft law aims to reverse the recent downturn in foreign direct investment after stricter controls were applied last year.
"In the last year, Mongolia approved in a very rash move [a foreign direct investment that]... has affected very badly the economic situation," he said. The government is trying to reverse that trend.
He said the draft law will allow private investment of any size without parliamentary approval although investment coming from state-owned enterprises will still require parliamentary approval.
He said the law aims to provide assurance that investments made under today's regulation won't be arbitrarily changed over a certain period. In other words depending on the size of the investment, the government will provide assurances over five, 10, or 20 years that the regulation governing their investment won't change due to future law amendments, he said.
Mr. Ochirbat added that the new law will aim to ensure that future investments won't be dictated by bilateral agreements as was the case in its 2009 agreement with Rio Tinto PLC (RIO) and Turquoise Hill Resources Ltd. (TRQ:$5.47,00$-0.01,00-0.18%) . That benchmark agreement formed the basis for the investment of billions of dollars in Mongolia's massive Oyu Tolgoi copper and gold project and also spurred a boom in other mineral resource projects. Mr. Ochirbat said the new law aims to ensure that future investment will be governed by national laws rather than investment agreements.
Separately, Mr. Ochirbat said that the draft mineral law introduced by Mongolia's President last year will be withdrawn from debate following public division about the details of the proposed mineral law.
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