Feb 4 Canada’s Centerra Gold Inc has been given the go-ahead from Mongolia’s lawmakers to mine the Gatsuurt Gold deposit after a five-year delay, as the resource-rich country looks to bolster its economic activity and gold reserves.
Mongolia’s once-booming economy has taken a steep slide, with the Asian Development Bank estimating growth in 2015 at less than 3 percent compared with 17.5 percent in 2011. Mongolia hopes to rake in greater revenue this year and stimulate growth by green lighting projects such as Gatsuurt, despite a backlash from some citizens.
The parliament passed a bill granting the country 34 percent ownership of the mine with 1.6 million ounces of probable gold reserves, a government website says. Centerra, which also owns the Boroo mine in Mongolia, will hold the remaining 66 percent of equity.
With the parliament’s approval, the government can now negotiate the final conditions for mining with Centerra.
Approval comes a year after legislators rejected the first deal proposed with a smaller stake holding for the government in return for larger royalty fees. It also follows an agreement signed last May to relaunch an expansion project at Mongolia’s Oyu Tolgoi copper mine, owned by Rio Tinto with a price tag of $4-6 billion.
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