Mongolia keen to move forward on mining deal: Canada

Thu Jan 10, 2008 9:27am EST
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By Lindsay Beck

BEIJING (Reuters) - Mongolia wants to move forward with major mining projects, Canada's top trade official said on Thursday, but he added officials there told him the government was still seeking a greater state share in strategic sectors.

Canadian Trade Minister David Emerson was the first cabinet minister to visit the mineral-rich Central Asian country in over a decade, in part to press Mongolia's government over delays in approving a copper and gold project backed by Canada's Ivanhoe Mines.

"I think there is a good likelihood that some of the projects caught in this period of debate will move along, but we'll just have to wait and see," Emerson told reporters in Beijing.

"But they also alerted us to the fact that they're going to want more state involvement in mining and uranium going forward, but they have yet to determine what that means."

Mongolia's government has been considering classing uranium as "strategic," which would guarantee the government at least a 50 percent share in each deposit of the nuclear fuel.

Ivanhoe and Australian miner Rio Tinto concluded a draft investment accord with Mongolia in April for the massive Oyu Tolgoi project in the Gobi desert, agreeing Mongolia would get a 34 percent stake.

But Mongolia's new prime minister last month withdrew the pact from consideration by a parliamentary working group, saying instead it would form a group of cabinet ministers and legislators to try to move the project forward.

The withdrawal came after Prime Minister Sanj Bayar gave a folksy speech in which he called on Mongolians to develop natural resources. Industry officials said it marked a new, and more proactive, approach to mining investment.   Continued...