Mongolian Parliment amendments pave way for Oyu Tolgoi development

The amendment of four laws including the repeal of a windfall tax, paves the way for Ivanhoe and Rio Tinto to develop the Oyu Tolgoi copper-gold complex.

Author: Mineweb Reporter
Posted: Tuesday , 25 Aug 2009

The Mongolian parliament has approved the amendment of four laws, including the repeal of a windfall profits tax, paving the way for increased investment in the country.

And, in particular giving a green light to the Investment Agreement between the Mongolian government, Rio Tinto and Ivanhoe for the Oyu Tolgoi copper-gold complex in Mongolia's South Gobi region.

The windfall profits tax on copper and gold will be canceled effective Jan. 1, 2011, well before the Oyu Tolgoi project is scheduled to begin production.

In a statement to the London Stock Exchange, Tom Albanese, chief executive, Rio Tinto said 'This is an incredibly important milestone in bringing onstream one of the finest undeveloped copper-gold projects in the world. The Investment Agreement is also a landmark for the future development of Mongolia's resources industry.

Under the terms of the Investment Agreement, the Government of Mongolia will hold a shareholding of 34 per cent in Ivanhoe Mines Mongolia Inc. Key terms include a stable and operational tax environment in relation to the development and operation of the Oyu Tolgoi Project and certainty as to the term of the investment.

Shares in Ivanhoe surged 15% on the announcement.