Mongolia sealed a long-awaited multibillion-dollar deal with Ivanhoe Mines of Canada and Anglo-Australian miner Rio Tinto yesterday to develop one of the world’s richest copper deposits.
The deal to exploit the Oyu Tolgoi mine was signed by the three parties in a ceremony in the capital Ulan Bator, marking one of the biggest investments in Mongolia since the former Soviet satellite went capitalist two decades ago.
No figure was immediately given for the size of the deal, which was six years in the making, but Mongolia’s minister for mineral resources and energy Dashdorj Zorigt said last month that it was worth US$4 billion.
“This is a significant milestone and we now look forward to working together to develop what I firmly believe is the best undeveloped copper deposit in the world,” Bret Clayton, chief executive of Rio’s Copper and Diamonds group, said in a statement released at the signing.
It said the Mongolian government would own a 34 percent stake in Ivanhoe Mines Mongolia LLC, the project license holder.
The mine in the south Gobi desert will employ as many as 3,000 workers, with thousands more finding jobs along the supply chain, providing a significant boost to the economy of the resource-rich country, one of the poorest in Asia.
Oyu Tolgoi, located about 80km north of the Chinese border, is expected to produce 450,000 tonnes of copper and 330,000 ounces of gold annually over 35 years, Rio Tinto’s statement said.
Mongolia’s GDP — US$5.26 billion last year, World Bank figures show — is expected to increase 34.3 percent over the life of the mine, a 2005 project plan said.
Ivanhoe said it would release an updated plan and financial details after the signing ceremony.
Zorigt, the mineral resource minister, had previously estimated the project could boost Mongolia’s per capita GDP, at about US$1,800 last year, to US$15,000 by 2015.
The deal’s signing comes more than nine years after Ivanhoe started exploration at the Oyu Tolgoi site and six years after it was awarded mining licenses.
Talks had dragged on as Mongolia and Ivanhoe haggled over how big a share the government should take.
Ivanhoe eventually agreed to give the government the 34 percent equity interest and the deal cleared the final hurdle in August when Ulan Bator agreed to scrap a 68 percent windfall tax on copper and gold sales.
Analysts said the deal would provide a “blueprint” for foreign investors wanting to access Mongolia’s rich deposits of copper, gold, uranium, silver and oil.
“This is a pathfinder transaction,” said James McGlew, a senior dealer at Argonaut Securities in Australia. “Hopefully this is the blueprint on how they will develop this part of the economy.”
Rio said it made an initial US$303 million investment for a 9.95 percent stake in Ivanhoe Mines Ltd and has “the obligation to invest 388 million dollars for a further 9.95 percent stake.”
Rio has the option to increase its stake in Ivanhoe Mines to 46.65 percent through fixed-price options and on-market purchases.
It said production was expected to start as early as 2013 with “a five-year ramp-up to full production.”
The Oyu Tolgoi deal is the first of several big contracts the government is hoping to sign.
Next in the pipeline is Tavan Tolgoi, which is said to be the largest untapped coal field in the world. Mining companies and consortiums from Russia, China, South Korea and the US have submitted bids for the project.
A signaling system malfunction disrupted high-speed rail (HSR) services beginning at 8am today, with trains temporarily reduced to three northbound and three southbound trains per hour as authorities conduct inspections. The malfunction occurred on a section of track in Miaoli County during pre-operation checks early this morning, forcing northbound and southbound trains to use a single track, the HSR operator said. The regular schedule has been replaced with three hourly trains offering only nonreserved seating in each direction, stopping at every station, it said, adding that business class cars would still have reserved seating. Departures from terminal stations are scheduled at the top
DRONE CENTRAL: Taiwan aims to become Asia’s democratic hub for drones, with most exports focused on high-quality military-grade models, an official said Taiwan’s drone industry is expected to expand significantly by 2030, producing 100,000 units per month and exporting half of them, the Ministry of Economic Affairs said yesterday. Current drone production capacity is about 15,000 units per month, but the industry can quickly scale up as demand increases, Industrial Development Administration Director-General Chiou Chyou-huey (邱求慧) told a news conference in Taipei. Taiwan’s drone output grew 2.5-fold last year to NT$12.9 billion (US$408.3 million) under a government program to develop the uncrewed vehicle sector, he said. The Executive Yuan in October last year approved plans to invest NT$44.2 billion into domestic production of uncrewed aerial
VERBOSE VESSELS: A CGA cutter and a China Coast Guard exchanged verbal barbs for more than a day in Taiwanese-controlled waters before the Chinese vessel left The Taiwanese and Chinese coast guards had a standoff near the strategically located Pratas Islands (Dongsha Islands, 東沙群島) in the north of the South China Sea, the Coast Guard Administration (CGA) said yesterday. The two sides engaged in intense radio exchanges over sovereignty claims during the 33-hour standoff. China Coast Guard vessel 3501 eventually left the restricted waters, 26.6 nautical miles (49.2km) west of the Pratas Islands, at 5pm yesterday, the CGA said. Lying approximately between southern Taiwan and Hong Kong, the Taiwan-controlled Pratas are seen by some security experts as vulnerable to Chinese attack due to their distance — more than
WARNING: China should stop engaging in actions that undermine regional peace and stability, as it would only build resentment among people across the Strait, the CGA said China has deployed more than 100 navy, coast guard and other vessels in waters from the Yellow Sea to the South China Sea and the western Pacific since US President Donald Trump and Chinese President Xi Jinping (習近平) met in Beijing, National Security Council Secretary-General Joseph Wu (吳釗燮) said yesterday. “In this part of the world, #China is the one & only PROBLEM wrecking the #StatusQuo & threatening regional peace & stability,” Wu wrote on X. In a separate post, he said Beijing was coercing Taiwan’s maritime domain, calling it illegal and provocative, after the Coast Guard Administration (CGA) expelled a
RSS