Mongolia MPs to discuss draft tax, invest laws Tues
Reuters
Reuters - Tuesday, August 25
malaysia.news.yahoo.com
BEIJING, Aug 24 - Mongolia's parliament is set on Tuesday for a first reading of four laws that will pave the way for foreign mining investment, including billions of dollars promised for the Oyu Tolgoi copper and gold project.
Standing committees met on Monday to consider the four draft laws, the most contentious of which is a proposal to repeal a windfall profits tax of 68 percent imposed three years ago. They will be considered in a full session on Tuesday.
Oyu Tolgoi developer Ivanhoe Mines Ltd <IVN.TO>, partner Rio Tinto <RIO.AX><RIO.L> and the Mongolian government earlier this month reached a draft agreement that requires changes to the legal framework for foreign investment. The other drafts involve revisions to the corporate income tax law and additions to the water and road laws.
In committee meetings last week, the cancellation of the windfall profit tax failed to pass unanimously, necessitating additional readings by parliament.
While some lawmakers have come to see the hastily passed law as a hindrance to foreign investment, because of its stipulation that gold and copper not smelted in Mongolia are subject to the tax, others see the tax as a source of useful revenue for Mongolia.
Mongolia does not have a copper smelter despite decades of copper concentrate exports from a Russian-Mongolian mine, which means the state has earned less than it might have from those exports. But Ivanhoe argues that the cost of building a smelter for the Oyu Tolgoi deposit in the remote Gobi desert would raise its cost and risk prohibitively.
Mining industry officials in Mongolia said they expected the other three drafts to pass smoothly after the debate on changing the windfall profit tax is concluded. (Reporting by Danille Mario, writing by Lucy Hornby; editing by Sue Thomas) |
