Mongolia ends fight over $100 mln mining license arbitration

Sol Strategies

07/03/2016 06:46

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 Government of Mongolia and Khan Resources Inc. 
successfully reached an agreement that effectively resolves all 
outstanding issues in regards to the international arbitration 
awards," Mongolian Finance Minister Bolor Bayarbaatbar said in a 
statement released by Khan  KRI.CD  late on March 6. 
    "The settlement demonstrates the Government's ongoing 
commitment to improving the investment climate," he said. 
    Mongolian finance ministry officials could not be reached 
for comment on the settlement while in Toronto for the annual 
Prospectors & Developers Association of Canada conference, where 
the Mineral Resources Authority said it will pitch mining and 
infrastructure projects and auction off exploration licenses. 
    "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.  
    Khan Resources' statement did not say how much the 
government paid. 
    Mongolian Prime Minister Chimed Saikhanbileg has been 
touting the minerals-rich country as "Open for Business" in the 
wake of 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 
giant Rio Tinto  RIO.AX  RIO.L  and Khan Resources. 
    A Paris tribunal last March ordered Mongolia to pay 
Toronto-listed Khan Resources damages for revoking Dornod 
uranium mining license in 2009 and transferring it to Russian 
partner ARMZ. 
    Mongolia refused to make the payment, and last week Khan 
said it would press the Canadian government 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.  
    The prime minister survived a no-confidence in January for 
his role in signing an agreement with Rio Tinto to push forward 
a $5 billion underground mining project at its Oyu Tolgoi copper 
mine.  
     
 
 (Reporting by Terrence Edwards; Editing by Michael Perry) 
 ((Sonali.Paul@thomsonreuters.com; +61 3 9286 1419; Reuters 
Messaging: sonali.paul.thomsonreuters.com@reuters.net)) 
 
Keywords: MONGOLIA KHAN RESOURCES/