Mongolia eases restrictions on foreign investors

Fri Oct 4, 2013 4:46am EDT
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* New law aims to revive foreign investment

* Analysts say is step in right direction, but more to be done

* Mongolia's growth closely tied to its vast copper, coal resources

By Terrence Edwards

ULAN BATOR, Oct 4 (Reuters) - Mongolia has passed a law aimed at reviving foreign investment by easing restrictions on investors in key sectors such as mining and by providing greater certainty on the taxes they must pay.

The new regulations take effect on Nov 1 and replace two previous laws, including one that imposed restrictions on foreign investments in strategic sectors after state-owned Aluminum Corp of China (Chalco) made a bid to take control of Mongolia-focused coal miner SouthGobi Resources in 2012.

Investors and analysts said the new law was a step in the right direction following more than a year of uncertainty over investment rules, which many blamed for a slump of 43 percent in overseas investment in the first half of 2013, on an annual basis.

Economic growth in the sparsely populated and landlocked country is heavily tied to its vast copper and coal resources, and reinvigorating foreign investment has been a top priority for its government.

"Without a doubt, it is a very positive development," said Sam Spring, chief executive of Mongolia explorer Kincora Copper .   Continued...