MPS DEMAND THAT PM AMEND OYU TOLGOI CONTRACT

Ulaanbaatar, Mongolia, /MONTSAME/ The Premier S.Batbold responded Tuesday to a requirement put by some MPs about altering the Oyu tolgoi (OT) investment contract in respect of Mongolia's interests. His letter has been sounded by Ch.Khurelbaatar, a head of the Cabinet Secretariat of Government.
Twenty MPs including B.Bat-Erdene, Z.Enkhbold, Ts.Batbayar, N.Batbayar, Ts.Davaasuren and D.Baldan-Ochir consider that the current OT investment contract can not be fruitful for Mongolians, it even has made Mongolia run into USD 2 billion debt to the investors.
The MPs do not see the letter as the PM's own reply, "it looks too similar to the comment sent by the Ivanhoe Mines."
N.Batbayar MP underlined that the PM must obey Mongolia's laws:"Any parliamentary resolution is equal to the law, but the Premier is not willing to implement the 57th resolution of parliament."
"We, lawmakers, want to increase shares of the Mongolian side in the OT deposit to 50 per cent, and we do not understand why the cabinet is standing at the Ivanhoe Mines Mongolia Inc. side, why the cabinet has not altered the investment contract until today," said D.Gankhuyag MP. "The Mongolian side bought 34 per cent of the deposit and has now a debt of 2 billion US dollars while Ivanhoe Mines has already made 3.6 billion US dollars."
Ts.Davaasuren said it is time to take next action "since the Premier did not give a satisfactory response." S.Erdene and B.Bat-Erdene MPs "wonder why the cabinet protects the investors' interest and ignores the parliamentary resolution".
The resolution says that in the OT investment contract there is a clause that blocks any laws and resolutions of Mongolia after the contract comes to force. Moreover, for the sake of the OT investors a windfall tax of 68 per cent was annulled, a law on water was amended, and a decision was made by government to take from the inverstors a payment for exploitation of natural resources, but it is not valid so far.
The resolution says the Mongolian side is to own at least 50 per cent of the deposit after having recovered a first part of investment. By the current contract, Mongolia is allowed to raise the issue of the deposit's 34 per cent after 30 years. The MPs say that "after having recovered the investment" must be understood as "as soon as investment are covered" otherwise Mongolia will have to wait for its 34 percent shares whole 25-27 years.
They say Mongolia is able to recover the investment in 4.8 years if a copper price is USD 4,400 per ton and in 2.8 years if it is USD 7,000.
B.Khuder