Long-awaited Oyu Tolgoi deal will be signed on Tuesday – IvanhoeLong-awaited Oyu Tolgoi deal will be signed on Tuesday – Ivanhoe
TORONTO – After trying for more than six years, Canada’s Ivanhoe Mines and partner Rio Tinto expect to sign an agreement with the government of Mongolia on Tuesday, to develop the giant Oyu Tolgoi copper/gold mine in the country.The signing will take place in a State ceremony, in the Great Hall of the Parliament House in the capital city of Ulaanbaatar, and will be attended by Mongolia’s President Tsakhia Elbegdorj, Prime Minister Sanjaa Bayar, parliament speaker Damdin Demberel, members of the Cabinet, members of the national Parliament, government officials and invited representatives of international embassies, the Mongolian business community, civic organizations and the public.
The investment agreement, which “establishes a legal, stable, long-term tax and regulatory environment” for the construction and operation of the Oyu Tolgoi mining complex, will be signed by representatives of Ivanhoe Mines and Rio Tinto.
Under Mongolia’s Minerals Law, the government’s signatories will be the Minister of Finance, the Minister of Mineral Resources and Energy and the Minister of Environment and Tourism.
The deal is seen as a vital step for Mongolia to begin reaping the economic benefits of its vast mineral wealth.
Besides the direct implications of the Oyu Tolgoi project, the government has also been putting off signing agreements for other mining projects until it has finalised the Oyu Tolgoi deal, which is expected to set a precedent for future agreements.
In August, the country’s Parliament approved changes to four laws, clearing the way for the Oyu Tolgoi pact deal, and government officials had indicated that they wanted the agreement signed by the end September.
However, the signing was delayed because additional time was needed to ensure the wording in the English and Mongolian language versions of the document was clear and that the two versions were synchronised.
Prime Minister Sanjaa Bayar was also in South Korea for medical treatment for most of September.
The investment agreement is understood to give the government a 34% stake in the Oyu Tolgoi project and will open the way for full-scale construction to start on Oyu Tolgoi.
The mine is expected to produce an average of 450 000 t/y of copper and 330 000 oz/y of gold, over a 35-year life-of-mine.
The deposit contains 78,91-billion pounds of copper resources and 45,19-million ounces of gold, based on a March 2008 resource estimate update.
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