By Robb M. Stewart
MELBOURNE--A Canadian gold and copper explorer part-owned by Rio
Tinto PLC (RIO) has had two mining permits suspended by the
Mongolian government, signaling a possible deepening in a dispute
with the emerging Asian nation over the huge Oyu Tolgoi mining
development.
Entree Gold Ltd. (EGI), which has been prospecting on land
surrounding the Oyu Tolgoi gold and copper mine in the Gobi Desert,
late Wednesday said two mining licenses were suspended and another
government order relating to the conversion of an exploration
license into a mining license was cancelled. Rio Tinto controls the
Oyu Tolgoi mine, and owns about 24% of Entree, through its holdings
in Toronto-listed Turquoise Hill Resources Ltd. (TRQ).
Rio Tinto said Thursday it had no immediate comment on the
matter.
The latest move comes as Mongolia is refusing to support Rio
Tinto's efforts to raise as much as $6 billion in loans tied to Oyu
Tolgoi. Under a 2009 agreement, the government holds a 34% stake in
the mine. Government officials have complained that the
Anglo-Australian miner hasn't been transparent about the operation
and has structured the project's capital in a way that benefits the
miner at the expense of the government.
Entree said the temporary suspension of the two mining licenses
meant they unable to be transferred or sold. The company said it
believes it has complied with Mongolian laws and regulations and is
working to resolve the matter.
Write to Robb M. Stewart at robb.stewart@wsj.com
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