REFILE-Ex-Oyu Tolgoi chief sees Mongolia investment rules improving

Wed Feb 26, 2014 10:47pm EST
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By Terrence Edwards

ULAN BATOR Feb 27 (Reuters) - Rio Tinto's former Mongolian chief and boss of the massive Oyu Tolgoi copper project says the country is taking the right steps to arrest a drop in foreign investment but needs to do more to ease uncertainty for explorers and developers.

Four months after parting ways with global miner Rio Tinto, Cameron McRae has joined the advisory board of Toronto-listed explorer Kincora Copper, as it tries to reclaim licenses revoked by the Mongolian government that spawned a C$7 million writedown ($6.3 million).

McRae has also been appointed executive chairman of Mongolia-based consulting firm SkyPath Partners LLC, which is aiming to help investors navigate Mongolian regulations and raise capital.

"There's a lot of money that needs to come into Mongolia and it's not just going to get there by itself. The intermediary role is important," McRae told Reuters.

Few would have more experience than McRae in dealing with Mongolian authorities, as he saw multiple disputes unfold while leading the $6.5 billion Oyu Tolgoi project, the biggest foreign investment in Mongolia.

Parliament members attempted to amend a 2009 investment agreement between the government and Rio's majority-owned Turquoise Hill, which owns 66 percent of the mine, in 2011 and again in 2012.

Disputes over Oyu Tolgoi and broader regulatory uncertainty have deterred other investors looking to build mines in Mongolia and led to a 54 percent drop in foreign direct investment to $2.05 billion in 2013 from a year earlier.   Continued...