Canada minister to press Mongolia on mining deal

Tue Jan 8, 2008 11:38am EST
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OTTAWA (Reuters) - Canada's top trade official will press Mongolia's government on Wednesday over delays in approving a major copper and gold project backed by Canada's Ivanhoe Mines.

"Yes I will be raising the Ivanhoe project issue," Trade Minister David Emerson told reporters in a teleconference from Beijing.

"The fundamental rationale for going to Mongolia is that we have a substantial number of Canadian mining companies that are involved in Mongolia. There are legal and regulatory issues there," he said.

Emerson will travel to Mongolia on Wednesday, becoming the first Canadian cabinet minister to visit the country in over a decade.

Ivanhoe Mines, an exploration company, and Australian miner Rio Tinto, concluded a draft investment agreement with Mongolia in April for the massive Oyu Tolgoi project. Under the agreement Mongolia would take a 34 percent stake.

The pact was under review by a parliamentary working group but the Mongolian government withdrew it in late December and said it would form a group of cabinet ministers and legislators to try to move the project forward.

Past delays have already escalated the project costs for Rio Tinto and Ivanhoe.

Although it was not clear what changes Mongolia might want to make to the investment agreement, Emerson's comments suggested he believes Mongolia was concerned about capturing more domestic benefits from the project.

"We want to work with our companies and the government of Mongolia to ensure that Canadian companies are operating there with social responsibility as a prominent element of what they're doing," he said.

"We will be raising these issues with the government of Mongolia from the president, through the prime minister to my ministerial counterpart."

(Reporting by Louise Egan; Editing by Rob Wilson)