The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.
MINING REPORTER- Canada’s Ivanhoe Mines Ltd.is battling back against moves by the Mongolian government to secure a larger chunk of the promising Oyu Tolgoi copper-gold project, but investors are bailing out.
The Vancouver-based miner said it expects Mongolia to honour a 2009 investment agreement giving the country a 34-per-cent stake in Oyu Tolgoi for 30 years. Ivanhoe holds the remaining 66-per-cent interest. The company’s stock lost about one-fifth of its value on Monday before recovering about half that loss to close.
Ivanhoe shares were already under pressure, falling nearly 20 per cent last week as Mongolia started to signal its interest in upping its stake to as much as 50 per cent.
Ivanhoe said the existing ownership agreement of Oyu Tolgoi is legally binding and “deserves and requires the unqualified support of all parties.” It also warned that revising the deal, signed after six years of negotiations, could harm Mongolia’s reputation as a desirable place to invest.
“The investment agreement has been fundamental in building Mongolia’s reputation as an increasingly reliable and stable destination for foreign investment,” Ivanhoe said.
“With many significant resources projects still to be financed and developed … Ivanhoe Mines is confident that Mongolia’s leadership understands the fundamental importance of Oyu Tolgoi’s contractual commitments and stabilized investment agreement.”
Ivanhoe shares have been weighed down recently by the sliding price of copper, which has fallen alongside most commodities as fears mount about the threat of another global economic meltdown. Copper, one of the world’s most widely used metals, has dropped almost 30 per cent to about $3.30 (U.S.) per pound from its high of about $4.60 in February.
For the rest of this article, please go to the Globe and Mail website: http://www.theglobeandmail.com/report-on-business/international-news/ivanhoe-mines-pushes-back-at-mongolia-over-copper-mine/article2180166/