Mongolia set to pay $70 mln to end Khan mine dispute-source

By Terrence Edwards
ULAANBAATAR, May 13 (Reuters) - Mongolia is ready to deliver
a $70 million payment to Toronto-listed uranium miner Khan
Resources KRI.CD , a government source said, wrapping up a
seven-year dispute that tarnished the country's reputation as a
hot mining destination.
The resource-rich country that relies on China to buy nearly
all of its resources is settling disputes with miners one by one
to help revive foreign investment after four years of economic
decline.
Mongolian Prime Minister Chimed Saikhanbileg has repeated
the slogan "Mongolia is open for business" on visits around the
world in the hopes rebooting the economy, which the Asian
Development Bank projects will grow just 0.1 percent this year.
"We want to show that we're trying to improve our
relationships and reputation," said a Mongolian government
source. He said $70 million had been deposited into an escrow
account for payment to Khan Resources on Monday.
The source asked not to be named as the transaction had not
yet been completed.
Mongolia's Ministry of Finance was not immediately available
for comment.
Last year, a Paris tribunal ordered Mongolia to pay about
$100 million to Khan Resources as compensation for canceling its
uranium-mining licences for the the Dornod uranium project in
2009 and handing it over to Russia's ARMZ.
At a meeting during a major mining conference in Toronto in
March, Mongolia and Khan came together and settled on a payment
of $70 million.
The dispute with Khan Resources wraps up just as Rio Tinto (LON:RIO)
and its partners are set to resume work on a $5.3 billion
expansion of the Oyu Tolgoi copper mine following a three-year
delay due to disputes with the Mongolian overnment.
Investors are also keeping close watch on the Gatsuurt gold
mine in Mongolia, where Centerra Gold Inc CG.TO has waited
seven years for mining rights.