Rio Tinto Group, the world’s third-largest mining company, and Ivanhoe Mines Ltd. have won approval from Mongolia’s parliament to develop the $3 billion Oyu Tolgoi copper deposit, Ivanhoe said.
Lawmakers present voted 63 percent in favor of “a resolution that authorizes the government of Mongolia to conclude a long-term, definitive investment agreement with Ivanhoe Mines and Rio Tinto for the development and operation of the Oyu Tolgoi copper-gold mining complex in southern Mongolia,” Vancouver-based Ivanhoe said in a statement.
Ivanhoe has been trying for more than five years to win an investment agreement from Mongolia to develop Oyu Tolgoi and benefit from demand in China, the biggest metals buyer. London- based Rio called Oyu Tolgoi “the world’s largest undeveloped copper-gold resource” when it agreed to buy 10 percent of Ivanhoe in 2006.
Under a 2007 draft investment agreement, the government would have had the right to a 34 percent equity stake in the project and related taxes equivalent to 55 percent of the profits, Rio Chief Executive Officer Tom Albanese said in February 2008.
Mongolian President Tsakhiagiin Elbegdorj said last month he wants to change the terms to allow the government to take 50 percent of the profit, rather than buy an equity stake.
Oyu Tolgoi is about 80 kilometres (50 miles) north of Mongolia’s border with China. Ivanhoe in March 2008 estimated the copper resources in the project at 78.9 billion pounds and the gold resources at 45.2 million ounces.
SourcE: Bloomberg
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