UPDATE 2-Mongolia woos back miners after investment slump

Wed Apr 17, 2013 3:45pm EDT
 
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* Mongolia sees Oyu Tolgoi dispute settled soon

* Oyu Tolgoi CEO sees "constructive progress" in talks

* IPO of state-owned Tavan Tolgoi seen delayed

By Clara Ferreira-Marques

LONDON, April 17 (Reuters) - Mongolia, hoping to arrest a slide in foreign investment into its critical mining sector, is planning a new law that it says will increase stability by reassuring investors their money will be protected from future rule changes.

Foreign direct investment into Mongolia dropped 17 percent to $3.9 billion in 2012, coinciding with a string of moves by the government that deterred investments in copper and coal.

Regulatory concerns peaked earlier this year when Rio Tinto threatened to delay the start-up of the $6.2 billion Oyu Tolgoi copper and gold mine until it resolves differences with the government over their investment agreement.

Ochirbat Chuluunbat, deputy minister for economic development, said the government was confident of resolving the dispute with Rio within as little as "several weeks".

Mineral-rich Mongolia is also seeking to woo investors with a law that will make all new investments subject to legislation, rather than governed by bilateral deals which might be challenged or reinterpreted by the parties at a later date.   Continued...