ULAANBAATAR, March 7 (Reuters) - Mongolia has settled a dispute over an arbitration award that required it to pay more than $100 million last year to a Canadian miner for revoking a uranium mining license, just as it launches a push this week to attract new exploration interest.
“The Government of Mongolia and Khan Resources Inc. successfully reached an agreement that effectively resolves all outstanding issues in regards to the international arbitration awards,” Mongolian Finance Minister Bolor Bayarbaatbar said in a statement released by Khan late on March 6.
“The settlement demonstrates the Government’s ongoing commitment to improving the investment climate,” he said.
Mongolian finance ministry officials could not be reached for comment on the settlement while in Toronto for the annual Prospectors & Developers Association of Canada conference, where the Mineral Resources Authority said it will pitch mining and infrastructure projects and auction off exploration licenses.
“I think it helps their foreign investment case for Canadians and any foreign investor,” said Jim Dwyer, executive director of the Business Council of Mongolia.
Khan Resources’ statement did not say how much the government paid.
Mongolian Prime Minister Chimed Saikhanbileg has been touting the minerals-rich country as “Open for Business” in the wake of sharp declines in foreign investment since 2012 and plummeting prices for its top exports of copper and coal.
Investors turned cold on the country’s once-booming mining sector partially because of public disputes with miners such as giant Rio Tinto and Khan Resources.
A Paris tribunal last March ordered Mongolia to pay Toronto-listed Khan Resources damages for revoking Dornod uranium mining license in 2009 and transferring it to Russian partner ARMZ.
Mongolia refused to make the payment, and last week Khan said it would press the Canadian government to suspend aid to the country if no settlement was reached for the $106 million, including interest, it was owed as of February.
Saikhanbileg’s Democratic Party may take heat for the decision to settle the dispute from opposition and resource nationalist campaigners ahead of parliamentary elections on June 29.
The prime minister survived a no-confidence in January for his role in signing an agreement with Rio Tinto to push forward a $5 billion underground mining project at its Oyu Tolgoi copper mine.
Reporting by Terrence Edwards; Editing by Michael Perry