Foreign investors cry foul as Mongolia revokes mine licenses

Thu Nov 7, 2013 4:56am EST
 
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ULAN BATOR Nov 7 (Reuters) - Mongolia has annulled more than 100 exploration licenses as part of an investigation into mining sector corruption, raising further concerns among foreign investors about the risks of doing business in there.

Mongolia-focused Kincora Copper said on Thursday that it had received a letter from the Mineral Resources Authority saying that two of its licenses had been revoked following a criminal investigation into former government officials accused of illegally issuing a total of 106 exploration licenses between 2008 and 2009.

All of the 106 licenses have been cancelled.

Kincora Copper said the move, which will affect the licenses of an estimated 11 foreign and 67 domestic firms hoping to explore for a range of minerals, highlighted the uncertainty facing a growing legion of foreign investors.

"Security of tenure and a transparent legal system are key cornerstones for both domestic and foreign private sector investment," said Sam Spring, president and chief executive of Kincora Copper, in an email.

With legal proceedings already underway, the company suspended exploration activities on the two properties, known as North Fox and Tourmaline Hills, at the start of the year.

Mongolia's Ministry of Mining could not immediately be reached for comment. Representatives of the Mineral Resources Authority were also unavailable.

SOLD ON THE CHEAP?   Continued...