ULAANBAATAR (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 miner - Khan Resources - said in a statement that the government agreed to pay it $70 million by May 15 and to withdraw efforts to annul the award in a French court.
In exchange, Khan said it would stop pursuing court certification of its award in the United States, which may allow it to seize Mongolian commercial assets there.
Mongolian Finance Minister Bolor Bayarbaatbar said in a statement released by Khan (KRI.CD) late on Sunday: ”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.
“The settlement demonstrates the government’s ongoing commitment to improving the investment climate.”
Mongolian finance ministry officials could not be reached for comment on Khan’s announcement.
The agreement was seen helping investment in Mongolia.
“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.
Mongolian Prime Minister Chimed Saikhanbileg has been touting the minerals-rich country as “Open for Business” following sharp declines in foreign investment since 2012 and plummeting prices for its top exports of copper and coal.
A Paris tribunal last March ordered Mongolia to pay Khan Resources damages for revoking Dornod uranium mining license in 2009.
Mongolia refused to make the payment, and last week Khan said it would press Ottawa 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.
Reporting by Terrence Edwards; additional reporting by Rod Nickel in Toronto; Editing by Michael Perry/Jeremy Gaunt