Mongolia set to pay $70 mln to end Khan mine dispute-source

Sol Strategies

13/05/2016 04:54

By Terrence Edwards 
    ULAANBAATAR, May 13 (Reuters) - Mongolia is ready to deliver 
a $70 million payment to Toronto-listed uranium miner Khan 
Resources  KRI.CD , a government source said, wrapping up a 
seven-year dispute that tarnished the country's reputation as a 
hot mining destination. 
    The resource-rich country that relies on China to buy nearly 
all of its resources is settling disputes with miners one by one 
to help revive foreign investment after four years of economic 
decline.  
    Mongolian Prime Minister Chimed Saikhanbileg has repeated 
the slogan "Mongolia is open for business" on visits around the 
world in the hopes rebooting the economy, which the Asian 
Development Bank projects will grow just 0.1 percent this year. 
    "We want to show that we're trying to improve our 
relationships and reputation," said a Mongolian government 
source. He said $70 million had been deposited into an escrow 
account for payment to Khan Resources on Monday. 
    The source asked not to be named as the transaction had not 
yet been completed. 
    Mongolia's Ministry of Finance was not immediately available 
for comment. 
    Last year, a Paris tribunal ordered Mongolia to pay about 
$100 million to Khan Resources as compensation for canceling its 
uranium-mining licences for the the Dornod uranium project in 
2009 and handing it over to Russia's ARMZ.  
    At a meeting during a major mining conference in Toronto in 
March, Mongolia and Khan came together and settled on a payment 
of $70 million.  urn:newsml:reuters.com:*:nL4N16F3QS 
    The dispute with Khan Resources wraps up just as Rio Tinto 
and its partners are set to resume work on a $5.3 billion 
expansion of the Oyu Tolgoi copper mine following a three-year 
delay due to disputes with the Mongolian overnment. 
    Investors are also keeping close watch on the Gatsuurt gold 
mine in Mongolia, where Centerra Gold Inc  CG.TO  has waited 
seven years for mining rights. 
 
 (Reporting by Terrence Edwards; Editing by Richard Pullin) 
 ((Sonali.Paul@thomsonreuters.com; +61 3 9286 1419; Reuters 
Messaging: sonali.paul.thomsonreuters.com@reuters.net)) 
 
Keywords: MONGOLIA KHAN RESOURCES/