Subscribe free to our newsletters via your
. Energy News .

Mongolia's proposed law to affect mining
by Staff Writers
Ulaanbaatar, Mongolia (UPI) Jan 14, 2013

disclaimer: image is for illustration purposes only

Mongolia's proposed new mineral law threatens foreign investment, warns the country's business council.

The Business Council's 250 members include mining giant Rio Tinto -- whose Oyu Tolgoi copper-gold project is expected to account for about 30 percent of Mongolia's gross domestic product when it reaches full production -- Peabody Energy, General Electric Co. and Mitsubishi Corp.

The council's letter to Mongolian President Tsakhia Elbegdorj's office, obtained by the Financial Times, warns: "The impact of the draft law on the minerals industry will be to halt current minerals exploration and development in Mongolia and greatly discourage any future investment. ... Collateral damage is likely to include all other sectors of supply, including but not limited to the construction and real estate sectors, imposing a significant chain-reaction burden on the banking and financial institutions which they may not be able to withstand and leading to a deepening crisis."

While year-end statistics have not yet been released, just in the first half of 2012, Mongolia's economy grew 13.2 percent, figures from the government show.

Mineral product exports account for more than 90 percent of Mongolia's exports.

Dale Choi, an associate with private equity investment firm Origo Partners MGL, told Bloomberg that the proposed law would make mining projects aligned with the interests of the state. Also, settlements as small as a village would be allowed to decide whether or not to accept prospecting and exploration on land near them, Choi said.

"Nobody expected that the law would be so tough on mining," Choi said, adding that the majority of the population might be in favor of the law, particularly because local people feel they don't directly benefit from mining as does the country as a whole.

The proposed new law is also seen as an attempt to boost support for the re-election of Elbegdorj in the country's presidential elections, slated for June.

In their election campaigns last summer, many members of parliament said they would get tougher on foreign miners. And in the fall, more than 20 parliamentarians had petitioned to rewrite the investment agreement that governs Oyu Tolgoi.

In a report on Mongolia's evolving foreign investment regime for the East Asia Forum, Julian Dierkes, associate professor at the Institute of Asian Research, University of British Columbia, said "where foreign investors see resource nationalism, Mongolians see an attempt to preserve the resource wealth of their country and to reap its benefits for current and future generations."

Still, there is some element of "knee-jerk nationalism" in Mongolia and the Mongolian parliament, "with some leaders ignoring the fact that ownership of mineral resources does not necessarily automatically lead to profit," Dierkes wrote.

"Mongolia needs some of the skills, technologies and capital that foreign investors can provide," he stated.


Related Links
Global Trade News

Comment on this article via your Facebook, Yahoo, AOL, Hotmail login.

Share this article via these popular social media networks DiggDigg RedditReddit GoogleGoogle

Memory Foam Mattress Review
Newsletters :: SpaceDaily :: SpaceWar :: TerraDaily :: Energy Daily
XML Feeds :: Space News :: Earth News :: War News :: Solar Energy News

Global ecommerce sales topped $1 tn in 2012: study
Washington (AFP) Feb 5, 2013
Global Internet retail sales topped $1 trillion for the first time in 2012 with the United States holding the top spot but China rising fast, a market research firm said Tuesday. The report by eMarketer said ecommerce consumer sales grew 21.1 percent to just over $1 trillion, and are expected to grow another 18.3 percent in 2013, fueled by strong growth in Asia. The research firm said No ... read more

Obama's energy secretary stepping down

Emission trading schemes limit green consumerism

Latest Ways to Make Your Business Energy Efficient

China coal plant shut by health chiefs

When Wind Turbine Blades and Solar Panels End Up in Landfills

Sinopec aims for cleaner fuel

Hungary moves ahead on E.ON purchase

Deuterium Uptake in Magnetic Fusion Devices with Lithium Conditioned Carbon Walls

Sabotage may have felled U.K. wind turbine

Hgcapital And Blue Energy Agree UK Wind Farm Investment Deal

Japan plans world's largest wind farm

China revs up wind power amid challenges

SunEdison and CAP Sign Agreement to Build 100MW Solar PV Plant in Chile

Suntech Powers Largest Solar PV System in Saudi Arabia

MAGE SOLAR and Paradise Energy provide PV power plant for concrete manufacturer

Trina Solar to supply 30MW to Gestamp Solar for two projects in South Africa

World's First AP1000 Containment Vessel Top Head Ready

Westinghouse Commits To Czech Steel For AP1000 Plants At Temelin

Centrica makes U-turn on British nuclear plant plan

Fukushima operator TEPCO projects $1.29 bn year net loss

Reaping Profits from Landfill Biogas

Versalis and Yulex partner to produce guayule-based biorubbers

Agricultural Growth in Chinese Desert Offers Opportunities For Economic Value and Better Ecology

Biofuels Blend Right In

Reshuffle for Tiangong

China to launch 20 spacecrafts in 2013

Mr Xi in Space

China plans manned space launch in 2013: state media

Energy leaders say climate crisis more urgent

Understanding the historical probability of drought

Climate change clues from tiny marine algae -- ancient and modern

Birds may need a hand to weather climate change

The content herein, unless otherwise known to be public domain, are Copyright 1995-2014 - Space Media Network. AFP, UPI and IANS news wire stories are copyright Agence France-Presse, United Press International and Indo-Asia News Service. ESA Portal Reports are copyright European Space Agency. All NASA sourced material is public domain. Additional copyrights may apply in whole or part to other bona fide parties. Advertising does not imply endorsement,agreement or approval of any opinions, statements or information provided by Space Media Network on any Web page published or hosted by Space Media Network. Privacy Statement