A new mining boom may be just around the corner in Mongolia, mining industry executives said, as it moves to open nearly 21 percent, a bit more than one-fifth, of the country for exploration to shore up its finances following an IMF-led bailout.
This month Mongolia’s government removed the main obstacle to its $5.5 billion IMF-led bailout. It annulled a controversial banking law that would have required companies like Rio Tinto to funnel all sales revenues from foreign investment projects through Mongolian banks and proposed the wider exploration area.
Andrew Stewart, managing director and CEO of Xanadu Mines, told CNBC’s “Street Signs” that the reform along with other steps to opening the mining sector should see investment grow.
“It is an important thing for Mongolia as a whole. I think the reaction and the commitment you are seeing from the Mongolian government over the last two weeks to repeal this tax, it shows its firm commitment to really get the foreign investments going and particularly that is very much settled on the mineral exploration and the mining industry in Mongolia”, Stewart said.
Stewart told CNBC that Xanadu’s flagship Kharmagtai project, located 120km south of Oyu Tolgoi, demonstrates that Mongolia offers increasingly favorable odds for discovering significant copper and gold deposits when compared to mature mining jurisdictions such as Australia and Canada.
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