Mongolia ends fight over $100 million mining license arbitration (updated)

Sol Strategies

07/03/2016 12:00

(Adds settlement details) 
    By Terrence Edwards 
    ULAANBAATAR, March 7 (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. 
    Investors turned cold on the country's once-booming mining 
sector partially because of public disputes with miners such as 
Rio Tinto  RIO.AX  RIO.L  and Khan. 
    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.  urn:newsml:reuters.com:*:nL2N16B2F6 
    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) 
 ((Sonali.Paul@thomsonreuters.com; +61 3 9286 1419; Reuters 
Messaging: sonali.paul.thomsonreuters.com@reuters.net)) 
 
Keywords: MONGOLIA KHAN RESOURCES/