Thursday, April 12, 2007

Ivanhoe signs the Mongolia mining deal

After a couple of years of standstill, Ivanhoe has finally signed the agreement with the Mongolian government. Does it mean a good thing for the people of Mongolia? Perhaps. While many environmentalists are resentful over the last 5 years of boom in the mining sector, the government should be relieved, the duty of feeding the economy has been made a bit easier with the findings. Ivanhoe estimates that Mongolia will be one of the largest mining countries in a few years as further explorations are made.

Mongolia has the right to purchase up to 34 per cent of the Oyu Tolgoi project under a new mineral law passed last year. As well, the Asian country passed a "windfall profits" tax law last year that sees miners' shipments taxed at a rate of 68 per cent or higher when gold trades at $500 (U.S.) or more an ounce and when copper reaches $2,600 or more a ton.
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