2007/12/25

Prime Minister Withdraws Oyu Tolgoi Agreement from Parliament

It is more likely that the new Prime Minister S.Bayar is going to withdraw the draft investment agreement submitted to the Parliament on the Oyu Tolgoi, a major copper and gold project in the southern province.

Some specific articles of the multi-billion dollar agreement including the percentage of the government's stake of 34% would be reviewed again by the government and resubmit to the Parliament with 51%. Two different working groups were set up to negotiate with the investors on
this. Opposition Member of Parliament S.Lambaa confirmed the information that the draft investment agreement has been withdrawn back.
"The draft agreement is put above the laws and regulations of Mongolia, which should not be acceptable."
The agreement was to be signed between the Government of Mongolia and Canadian invested Ivanhoe Mines Mongolia Inc company after the Parliament approves.

The UB Post plans to write an editorial piece on this.

7 comments:

  1. I agree with most of you comments...was talking about the select few-who actually gain by keeping the average Mongolian citizen in adject povertry.

    I am not a Ivanhoe StakeHolder-but I can see what effect the GOM is having by catering to special interest groups instead of doing what needs to be done-giving economic opportunity to the Yak Herders of Mongolia-to join the modern age-see infrastructure buildouts-roads...bridges-utility stations created...socio economial spin offs from the support industries that will be needed...ast he services sector in Monoglia will grow leaps and bounds-to keep the mining industries operational...the GOM tax coffers will balloon and the standard of living will increase across the board-if Bayar is smart enough to see that road backwards is paved with nothing but gravel and detours that lead nowhere...on a trip with the Russians and the Chinese in their prior lives-that went nowhere-and giving the West the opportunity it needs to get things going-as only the free flow of capital and goods in a market society can deliver...is what is needed...Western money...western technology-and western business ...best of breed...business practises.

    Canada has become one of Mongolia's best friends...given Mongolia is still subect to the rule of law...the World Bank...and WTO and the UN-I think International agreements for a forvabe investment climate in Mongolia will be worked out.

    Because the true costs of them not being worked out-will set Mongolia back even further down the path of realizing its potential and joining the world economies of this world...then where it exists right now...and fwiw I believe Bayar knows this...and that the path his is charting is forwards...where it paved with opportunity-yes some risk...but with risk comes reward...and your level of reward is always comensurate with the level of risk invovled...and for once in a long long time...I am hopefull that the dollars invested with filter its way down the to the average Mongol in the street..instead of just rich Mongolian Party fatcats getting fatter and the havenots winding up with less then they have already.

    Mongolia should set up an endowement trust fund much like Alberta does in Canada on their oil patch taxes and concesssions...that would be a rainy day fund for Mongolia to draw on to fund state projects that bring a benefit to all.

    However me thinks they would needs some strong oversite and oversteer managing a fund that would be quite large in numbers...to ensure the corruption that exists in Mongolia...both apparent and hidden in the shadows...did not use the funds for personal motives.

    I think Bayar gets the IA on IVN done before end of March-and uses it for an election platform of what can be done when mutual benefits are invovled...and a win/win situation for investment.foreign investment is created.

    Ciao

    ReplyDelete
  2. I agree with most of you comments...was talking about the select few-who actually gain by keeping the average Mongolian citizen in adject povertry.

    I am not a Ivanhoe StakeHolder-but I can see what effect the GOM is having by catering to special interest groups instead of doing what needs to be done-giving economic opportunity to the Yak Herders of Mongolia-to join the modern age-see infrastructure buildouts-roads...bridges-utility stations created...socio economial spin offs from the support industries that will be needed...ast he services sector in Monoglia will grow leaps and bounds-to keep the mining industries operational...the GOM tax coffers will balloon and the standard of living will increase across the board-if Bayar is smart enough to see that road backwards is paved with nothing but gravel and detours that lead nowhere...on a trip with the Russians and the Chinese in their prior lives-that went nowhere-and giving the West the opportunity it needs to get things going-as only the free flow of capital and goods in a market society can deliver...is what is needed...Western money...western technology-and western business ...best of breed...business practises.

    Canada has become one of Mongolia's best friends...given Mongolia is still subect to the rule of law...the World Bank...and WTO and the UN-I think International agreements for a forvabe investment climate in Mongolia will be worked out.

    Because the true costs of them not being worked out-will set Mongolia back even further down the path of realizing its potential and joining the world economies of this world...then where it exists right now...and fwiw I believe Bayar knows this...and that the path his is charting is forwards...where it paved with opportunity-yes some risk...but with risk comes reward...and your level of reward is always comensurate with the level of risk invovled...and for once in a long long time...I am hopefull that the dollars invested with filter its way down the to the average Mongol in the street..instead of just rich Mongolian Party fatcats getting fatter and the havenots winding up with less then they have already.

    Mongolia should set up an endowement trust fund much like Alberta does in Canada on their oil patch taxes and concesssions...that would be a rainy day fund for Mongolia to draw on to fund state projects that bring a benefit to all.

    However me thinks they would needs some strong oversite and oversteer managing a fund that would be quite large in numbers...to ensure the corruption that exists in Mongolia...both apparent and hidden in the shadows...did not use the funds for personal motives.

    I think Bayar gets the IA on IVN done before end of March-and uses it for an election platform of what can be done when mutual benefits are invovled...and a win/win situation for investment.foreign investment is created.

    Ciao

    ReplyDelete
  3. Wow some people get really mad that they are not gonna exploit a poor nation like Mongolia.

    You people don't even listen to yourselves. What are you talking about? Totally illogical! Just panicking out of fear that you may fail to steal a poor nation's minerals, under the cover of FDI.

    To start with, Mongolia hardly has yaks as such. It is Tibet that has yaks!! Mongolia's primary 5 types of livestock (horse,camel, cattle, sheep, goat) do not even include yaks. (Pig, chicken, goose, yak are considered "imported" husbandary - secondary, if you will.) Pls, notice that at least.

    2) Mongolia has Russia!!!! - who wants to use her money and expertise to explore those sites!!!
    Hello???

    3) In other words, Ivonhoe is not the only option we have. So pls, stop threatening Mongolia, as if Ivonhoe were going to be the savior of the country, something.

    4) Who said Mongolia is gonna start "feeding the livestock or the population" when/if Ivonhoe is let to use the Oyu Tolgoi?

    5) BTW, Mongolians are not starving. That is not the issue (Just compare Africa and Mongolia. Maybe you'd rather talk of hunger over there?). Mongolians have lack of built accomodidation (- which Russia is promising, not Ivonhoe).

    ReplyDelete
  4. The last comments match the reality and are mostly true, except the statement saying Mongols are not hungry as Africans.
    The country is poor and most people are poor and hungry!
    So don't pretend that the situation today is o.k.
    It is very close to become a country similar to an African.
    We need a western technology and I think it is the best solution regarding Oyu tolgoi and other big deposits. We have already enough joint ventures with Russia and one should try to keep balance and not go deeper in a "love relationship" with one country. By the way, the west has so far a leading position in this business so we need to learn latest technology and "know hows".

    ReplyDelete
  5. To Sodon,

    My dear, what can I say? especially here in Internet.

    I wish you lived like myself in the West (both USA and Western Europe) for long and would see things more clearly/maturely and had a more comparative perspective on matters, e.g. hunger or "admiration of the west".

    I understand that you want to belive in salvation by western companies. But that is an illusion. "The grass is greener on the other side", always! Illusion.

    I know Mongolians are poor. I've been in and out of the country over 15 years, seeing the heart-breaking misery over there. But that is not gonna be saved by western companies!!! Believe me.
    (However tempting the picture of the so-called "western technological transfer" is in your mind)

    Belive it or not, Mongolians should rely on Russia again during this downturn of history. Mongolia doesn't have TRUELY globally thinking intellectuals yet, (unlike India or even China) so Mongolia will be taken advantage on by western companies. Until Mongolian intellectuals get wiser and global, Mongolia should wait in "cooperating" with private companies from the West.

    Do not repeat others' mistake. Ironically. Do not repeat Africa's mistake. Africa also welcomed western private companies and the result is what you now fear! :))

    ReplyDelete
  6. All the prosperous nations of Asia such as Japan, South Korea, Ssingapore, China, Taiwan etc. benefited from United States and European investments and economic policies.

    Name one country that has had sustained economic growth as the result of Russian investments.

    It is questionable if the Soviet Union or now Russia has had sustained economic growth? Ha!

    ReplyDelete
  7. Well, I agree with the last comment by an "Anonym..." and just wanna again argue about what the "Anonym..." said who left a comment for me. Thanks by the way, and forgive my poor English too.
    It would've been easier to address you , Gentlemens, if you leave a name instead of "Anonymous", even a fake one, so that I can address you by such "name".
    My dear, I don't want believe in salvation by western companies, I want believe in better technologies.
    You might be a "Russian fan" and I understand and respect your opinion, but we don't have to rely only on Russians. The heart-breaking misery is not gonna saved by Russians too. You said Mongol intellectuals are dumb and we should wait and work with Russians (or let them teach us) until we get wiser and smart, and then say Goodbye to Russians and Hello to Westerners?! That is one of the dumbest thing Ive ever heard and at the same time very insulting! Any idea how long we should wait?
    Who says that Western companies will take advantage of us, and the Russians won't? It depends on us who we choose, and western companies didn't ruin Africa. Africans are to blame for the poverty and the ruin because they couldn't manage a good and profitable policy. So it depends a lot on the host country.
    Lastly, just wanna repeat what the latter "Anonym..." said: Take an example how the other Asian countries have benefited from the better technique and technology.
    p.s. I was fortunate to be for quite some time both in the US and West, so I know whatI am talking about.

    ReplyDelete