Again, not unjustified in my opinion.
WENDY STUECK MINING REPORTER
VANCOUVER -- New mining laws in Mongolia give the country the right to bargain for up to a 34-per-cent stake in "strategic" mineral deposits, creating more uncertainty for foreign resource investors and raising the potential for further delays for Ivanhoe Mines Ltd.'s flagship Oyu Tolgoi project.
"The reality is that the [Mongolian] government is clearly controlling the agenda of this project," said Raymond James analyst Tom Meyer.
"I think Ivanhoe shareholders should expect further delays, not on the order of months -- which I think is the view that's out there -- but realistically, we could be looking at years."
Vancouver-based Ivanhoe is developing the Oyu Tolgoi project, a big copper-gold deposit about 80 kilometres from the border between China and Mongolia.
The company has spent more than two years trying to strike a stability agreement with the Mongolian government for Oyu Tolgoi to cover issues such as taxes and royalties for the proposed mine, which is expected to cost more than $1-billion to put into production.
In a statement yesterday, Vancouver-based Ivanhoe said Mongolia's revised minerals law, and previous amendments to the country's tax law, "have set the stage for finalization of negotiations on a formal, long-term agreement with Ivanhoe."
"We now have a broad playing field with flexibility to tailor an agreement appropriate for the Oyu Tolgoi project," Ivanhoe chief executive officer John Macken said in a statement.
"We are confident that Ivanhoe and the government of Mongolia can proceed to reach a mutually beneficial accord that will establish a precedent for future capital-intensive projects backed by investors from around the world who are closely monitoring these developments."
The Mongolian Parliament approved a revised minerals law on Saturday. Under the revised law, "stability agreements" are to be replaced by investment contracts. New provisions double the term of such agreements from 15 to 30 years for projects expected to cost more than $300-million.
The revised law gives the Mongolian government the right to acquire an interest of up to 34 per cent of strategic deposits discovered through privately-financed exploration, and up to 50 per cent of deposits discovered through the use of state funds during the Soviet era.
The definition of a strategic deposit is broad, but includes deposits that could generate annual mineral production equivalent to more than 5 per cent of Mongolia's gross domestic product, a threshold that would be easily passed by Oyu Tolgoi if it were in production.
Previously, talk of Mongolian government participation in mining projects had focused on those projects that had been discovered with the use of state funds.
It's unclear how such an investment could affect Oyu Tolgoi: the law states that any acquisition of a state interest is subject to negotiation and would also depend on how much money the government would invest.
But the uncertainty around the new provisions, as well as a recently-passed windfall tax, are giving pause to foreign investors and shifting attention to projects in jurisdictions perceived to have more favourable political climates, Mr. Meyer said. -source
Related : Special risks when investing in a mining company
Showing posts with label Mining Laws. Show all posts
Showing posts with label Mining Laws. Show all posts
Tuesday, July 11, 2006
Tanzania starts talks on mining law
I expect that this trend will continue. Investors and International companies must understand that natural resources are major income source for many developing nations.
Tanzania has started preliminary talks with mining companies on renegotiating mining laws to give greater benefits to the country, President Jakaya Kikwete said on Tuesday.
Under existing mining laws, Tanzania's government earns 3% royalty fees from its minerals and imposes a 30% corporate tax that kicks in only after 100% depreciation of a company's capital investment in the country.
"That's where the problem is. Some mines are closing down after years of operating but before Tanzania can accrue any gains and we wonder whether they have made losses all along. So, we need to renegotiate this aspect," Kikwete told Reuters in South Africa on the sidelines of a technology conference.
"Talks on this question started yesterday (Monday). We are not trying to intimidate anyone. The companies appear to understand our position. We want a win-win situation, where the Tanzanian people can gain from their natural resources."
Mining is at the heart of Tanzania's efforts to boost growth. Tanzania's economy expanded by around 6,9% in 2005 but that rate is forecast to decline to 5,8% on spiralling fuel costs and drought.
Top gold miner AngloGold Ashanti, dominant diamond company De Beers, both part-owned by diversified miner Anglo American Plc, as well as RandGold are some of the key players in Tanzania's mining industry.
The companies were not immediately available to comment.
Kikwete said he had not set a deadline for any changes to the tax structure and Tanzania would negotiate in good faith.
In a wide-ranging interview, Kikwete also said that the government had intensified its fight against HIV and AIDS, and was using its own cash and funding from the US government and private initiatives to cut infections.
The prevalence rate had dropped to 7,3% from 8%, but that was still too high. Some 2-million Tanzanians are thought to carry HIV or AIDS and 440 000 of them need life-prolonging anti-retroviral (ARV) drugs, Kikwete said.
Under a five-year programme, Tanzania hoped to get ARVs to all people who needed them from a coverage of just 30 000 now, he said.
"It is a matter close to my heart. It is a big challenge and unless we tackle it, our young people could be decimated," Kikwete said.
Kikwete won Tanzanian presidential elections last December and has put sustained growth of east Africa's largest country and fighting corruption at the top of his agenda. - source
Tanzania has started preliminary talks with mining companies on renegotiating mining laws to give greater benefits to the country, President Jakaya Kikwete said on Tuesday.
Under existing mining laws, Tanzania's government earns 3% royalty fees from its minerals and imposes a 30% corporate tax that kicks in only after 100% depreciation of a company's capital investment in the country.
"That's where the problem is. Some mines are closing down after years of operating but before Tanzania can accrue any gains and we wonder whether they have made losses all along. So, we need to renegotiate this aspect," Kikwete told Reuters in South Africa on the sidelines of a technology conference.
"Talks on this question started yesterday (Monday). We are not trying to intimidate anyone. The companies appear to understand our position. We want a win-win situation, where the Tanzanian people can gain from their natural resources."
Mining is at the heart of Tanzania's efforts to boost growth. Tanzania's economy expanded by around 6,9% in 2005 but that rate is forecast to decline to 5,8% on spiralling fuel costs and drought.
Top gold miner AngloGold Ashanti, dominant diamond company De Beers, both part-owned by diversified miner Anglo American Plc, as well as RandGold are some of the key players in Tanzania's mining industry.
The companies were not immediately available to comment.
Kikwete said he had not set a deadline for any changes to the tax structure and Tanzania would negotiate in good faith.
In a wide-ranging interview, Kikwete also said that the government had intensified its fight against HIV and AIDS, and was using its own cash and funding from the US government and private initiatives to cut infections.
The prevalence rate had dropped to 7,3% from 8%, but that was still too high. Some 2-million Tanzanians are thought to carry HIV or AIDS and 440 000 of them need life-prolonging anti-retroviral (ARV) drugs, Kikwete said.
Under a five-year programme, Tanzania hoped to get ARVs to all people who needed them from a coverage of just 30 000 now, he said.
"It is a matter close to my heart. It is a big challenge and unless we tackle it, our young people could be decimated," Kikwete said.
Kikwete won Tanzanian presidential elections last December and has put sustained growth of east Africa's largest country and fighting corruption at the top of his agenda. - source
Tuesday, July 04, 2006
China Royalties on Mines
Yet another reason to put your money in commodities and not into miners, commodity stocks or commodity manufactures.
China to push for royalties on mines
Jul 4, 2006 8:44 AM GMT164
BEIJING (Reuters) - China will forcefully push to levy royalties on miners to help avoid the excessive development of its mineral resources and allow the government to get a share of the revenue, official Chinese media reported on Tuesday.
Beijing was formulating policies, including different royalties rates for mine explorers and developers and rules on mine transfers, the Economic Daily quoted Vice Minister of Land and Resources Wang Min as saying.
China has historically waived royalties on its miners. That has helped fuel excessive mining of coal, for instance, and made the industry the world's most dangerous.
Existing miners would be evaluated and backpayments of royalties would be charged, the paper said.
The plans are in line with Beijing's moves to raise resources tax and environmental charges on minerals, petroleum and natural gas.
China raised the resource tax on coal a year ago and has recently increased taxes on gold mines. In March, Beijing also started levying a landmark windfall tax on its oil producers, using it to compensate weak consuming groups for high oil prices.
China to push for royalties on mines
Jul 4, 2006 8:44 AM GMT164
BEIJING (Reuters) - China will forcefully push to levy royalties on miners to help avoid the excessive development of its mineral resources and allow the government to get a share of the revenue, official Chinese media reported on Tuesday.
Beijing was formulating policies, including different royalties rates for mine explorers and developers and rules on mine transfers, the Economic Daily quoted Vice Minister of Land and Resources Wang Min as saying.
China has historically waived royalties on its miners. That has helped fuel excessive mining of coal, for instance, and made the industry the world's most dangerous.
Existing miners would be evaluated and backpayments of royalties would be charged, the paper said.
The plans are in line with Beijing's moves to raise resources tax and environmental charges on minerals, petroleum and natural gas.
China raised the resource tax on coal a year ago and has recently increased taxes on gold mines. In March, Beijing also started levying a landmark windfall tax on its oil producers, using it to compensate weak consuming groups for high oil prices.
Subscribe to:
Posts (Atom)
