Mongolia ends fight over $100 mln mining license arbitration

By Terrence Edwards
ULAANBAATAR, March 7 (Reuters) - Mongolia has settled a
dispute over an arbitration award that required it to pay more
than $100 million last year to a Canadian miner for revoking a
uranium mining license, just as it launches a push this week to
attract new exploration interest.
"The Government of Mongolia and Khan Resources Inc.
successfully reached an agreement that effectively resolves all
outstanding issues in regards to the international arbitration
awards," Mongolian Finance Minister Bolor Bayarbaatbar said in a
statement released by Khan KRI.CD late on March 6.
"The settlement demonstrates the Government's ongoing
commitment to improving the investment climate," he said.
Mongolian finance ministry officials could not be reached
for comment on the settlement while in Toronto for the annual
Prospectors & Developers Association of Canada conference, where
the Mineral Resources Authority said it will pitch mining and
infrastructure projects and auction off exploration licenses.
"I think it helps their foreign investment case for
Canadians and any foreign investor," said Jim Dwyer, executive
director of the Business Council of Mongolia.
Khan Resources' statement did not say how much the
government paid.
Mongolian Prime Minister Chimed Saikhanbileg has been
touting the minerals-rich country as "Open for Business" in the
wake of sharp declines in foreign investment since 2012 and
plummeting prices for its top exports of copper and coal.
Investors turned cold on the country's once-booming mining
sector partially because of public disputes with miners such as
giant Rio Tinto RIO.AX RIO.L and Khan Resources.
A Paris tribunal last March ordered Mongolia to pay
Toronto-listed Khan Resources damages for revoking Dornod
uranium mining license in 2009 and transferring it to Russian
partner ARMZ.
Mongolia refused to make the payment, and last week Khan
said it would press the Canadian government to suspend aid to
the country if no settlement was reached for the $106 million,
including interest, it was owed as of February.
Saikhanbileg's Democratic Party may take heat for the
decision to settle the dispute from opposition and resource
nationalist campaigners ahead of parliamentary elections on June
29.
The prime minister survived a no-confidence in January for
his role in signing an agreement with Rio Tinto to push forward
a $5 billion underground mining project at its Oyu Tolgoi copper
mine.