New Mongolian investment law

Would like a summary of the new copper mine laws--

local news summary:

Mongolia's Cabinet has approved a draft investment agreement opening the way for development of the potentially huge but controversial Oyu Tolgoi copper-gold mine in the southern Gobi Desert.

An agreement between the government and Ivanhoe Mines, the Canadian company that discovered the deposit in 2001, has been held up by disagreements over how to share the wealth in a country suffering from widespread poverty and corruption.

Civic leaders attending a gathering Thursday accused the government of being too secretive in its handling of the issue.

"We Mongolians do not know very much about this draft agreement with Ivanhoe Mines. We have not been able to get concrete details so far," said J.Zanaa, a coordinator for the nongovernmental group "Soyombo."

The draft agreement, approved Tuesday by the Cabinet, calls for the Mongolian government to own a 34 percent stake in the project, and to pay for that stake using royalties from the mine, said Ch. Khurelbaatar, state secretary for the Finance Ministry.

"We have agreed that this partnership would own, finance, build and operate the Oyu Tolgoi project and its associated infrastructure to deliver a new era of resource-investment benefits for generations of Mongolians," John Macken, president and CEO of Vancouver-based Ivanhoe Mines, said in a statement dated Wednesday.

He described the plan as a "blueprint for an effective partnership of corporate and state interests."

Ivanhoe owns 100 percent of the mining concession for Oyu Tolgoi. But amendments last year to a 1997 Minerals Law require a large government stake in any foreign mine. That change was made in response to critics who accused the government of giving away Mongolia's wealth by allowing full foreign ownership of mines.

The draft agreement must be ratified by a two-thirds vote of Mongolia's 76-member Parliament, which is meeting until July 11 and then will recess until October. A date for debate on the agreement has not been released.