Mongolia Investment

Mongolia Investment

Yesterday, parliamentary group of MPRP and DemParty discussed the comments and conclusion of the working group of drafting amendment in the Mineral Law of Mongolia. The working group presented two draft alternatives. First alternative is to withdraw two drafts, because of the fact that the most of the lawmakers weren’t re-elected.

The second alternative is not to change the current Mineral Law of Mongolia and to sign in the investment agreement on Tavan Tolgoi and Oyu Tolgoi. MPs of MPRP group supported the second alternative. But MPs of DemParty debated on changing the current law. MP N.Batbayar was furious with the working group to discuss it without his existence, because he was in countryside working in his elected district. He was leading the working group during the previous parliament term and he is also included in the current working group.

The guidance on signing stability agreement investment on Oyu Tolgoi and Tavan Tolgoi is ready now. According to this guidance the Mongolian State will own 34% of Oyu Tolgoi and 51% of Tavan Tolgoi. The consent of two party leaders of owning more than 51% of the strategic deposits, before the election, was collapsed in relation with it. But there is a blurry provision of studying the possibility to increase the Mongolian ownership in Oyu Tolgoi after the initial investment is fully compensated. The investment agreement in these deposits will be made for the term, stated in article 29.3 of the Mineral Law of Mongolia.

This provision said that if the investment size will be more than 50 million US$ in first 5 years the term will be 10 years, investment over 100 million US$ guarantees 15 years and investment over 300 million guarantees 30 years of term.

MPRP voted for the second alternatives and DemParty group decision hasn’t made at the moment. Also the National Security Council is meeting regarding this issue. If both parties agreed upon the working group’s proposal, the draft resolution in adopting guidance of signing the investment agreement on Oyu Tolgoi and Tavan Tolgoi will be discussed by the State Great Khural within this week.