Ivanhoe Mines welcomes Mongolian cancellation of copper and gold tax
Tue Aug 25, 11:47 AM
The Canadian Press
ca.news.finance.yahoo.com
By The Canadian Press
VANCOUVER, B.C. - Shares in Ivanhoe Mines (TSX: IVN.TO) soared more than 20 per cent in Tuesday morning trading after the Mongolian parliament approved a sunset provision to cancel a 68 per cent tax on copper and gold.
Ivanhoe, which is a partial owner of the Oyu Tolgoi copper-gold development project in Mongolia, said it welcomes the decision to remove the windfall profits tax, effective Jan. 1, 2011.
The announcement sent Ivanhoe's shares up by $1.97 or 20.8 per cent to $11.45 in morning trading on the Toronto Stock Exchange.
"The votes today by overwhelming majorities of the members present for the special session of the State Great Khural represent a significant step in Mongolia's commitment to attract foreign investment in the development of the country's mineral resources," stated Ivanhoe president John Macken.
"This expression of confidence in Mongolia's future clears the way for finalization of an agreement with the government for the construction and operation of Ivanhoe's Oyu Tolgoi copper-gold complex in the South Gobi region. Now we are in a position to make arrangements with the government to sign the Oyu Tolgoi investment agreement in the near future," Macken added.
Ivanhoe and its partner, British-Australian global mining giant Rio Tinto (NYSE: RTP), have been negotiating an investment and profit-sharing agreement for Oyu Tolgoi with the Mongolian government for several years.
The Mongolian parliament voted in July to authorize the government to conclude a long-term, definitive deal to develop and operate what is considered to be one of the world's biggest copper developments.
Earlier this month, a revised agreement was endorsed by Mongolia's cabinet and national security council and the government asked parliament to consider revising four laws that would facilitate the finalization of the agreement. All four laws have now been amended.
The agreement would provide the Mongolian government with a 34 per cent equity interest in Ivanhoe Mines Mongolia Inc. LLC, which holds the Oyu Tolgoi mining licences.
Ivanhoe has already spent US$1 billion to develop the Oyu Tolgoi project to date. |
