Proposed Mongolia Tax Change Won't Impact Oyu Tolgoi -Ivanhoe
May 19 2010 - 3:48PM
Dow Jones News
A recent proposal to change Mongolia's tax on mines won't affect
the Oyu Tolgoi copper-gold project, said a senior executive from
the project's largest shareholder, Ivanhoe Mines Ltd (IVN.T).
Peter Meredith, Deputy Chairman of Canada-based Ivanhoe Mines,
said a change to Mongolia's "royalty tax won't affect the project."
Mongolia's ministry of finance is considering replacing a windfall
tax on miners with a sliding scale royalty scheme, which would
increase royalty payments from 5% to 10%, according to the price of
a commodity, the news agency Business Mongolia reported, citing the
finance minister S. Bayartsogt.
The project won't be affected by the proposed tax change because
Ivanhoe Mines and the government signed a 30-year investment
agreement in March which insures stabilized tax rates and
regulatory provisions, with an option of extending the term of the
agreement for an additional 20 years.
Major taxes and rates stabilized for the life of the agreement
include: corporate income tax; customs duty; value-added tax;
excise tax; royalties; exploration and mining licences; and
immovable property and/or real estate tax, Ivanhoe said on its
website.
The Oyu Tolgoi project is 66% owned by Ivanhoe and 34% owned by
the Mongolian government. Rio Tinto PLC (RTP) is the operator of
the project and owns a 22.4% stake in Ivanhoe.
The Oyu Tolgoi project is expected to start producing copper and
gold in 2013, and ramp up to full production of 450,000 tons of
copper annually five years thereafter.
Company Website: http://www.ivanhoemines.com
http://www.riotinto.com
http://www.business-mongolia.com/?p=5911
-By Alex MacDonald, Dow Jones Newswires; +44 (0)20 7842 9328;
alex.macdonald@dowjones.com
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