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Mongolian audit report claims 130 million USD from Oyu Tolgoi in unpaid taxes

By E.KHASH-ERDENE

The four billion USD underground expansion of Oyu Tolgoi copper and gold mine might be delayed once again, as Mongolia makes demands for unpaid taxes and penalties, shortly after the mine laid off 300 workers.
The Mongolian Tax Authority sent an audit report to Turquoise Hill Resources, which owns 66 percent of the 6.2 billion USD Oyu Tolgoi mine, demanding 130 million USD in unpaid taxes and penalties, and disallowed entitlements associated with the initial development of the mine on Monday.
In response to the claims made by the tax authority, Turquoise Hill said it is of the “firm view” that Oyu Tolgoi LLC, Turquoise Hill’s unit in charge of the mine, has paid all taxes and charges as required under the investment agreement and Mongolian law.
Kay Priestly, Turquoise Hill’s Chief Executive Officer, said, “We strongly disagree with the claims in the audit report and are currently reviewing all options to resolve this matter. It is important that we protect our right of tax stabilization provided by the investment agreement.”
The company said that it is reviewing the audit report and if violations of the investment agreement are found, it will consider international arbitration. “Any element of the claim that amounts to a breach of the investment agreement will trigger the dispute resolution process outlined in the investment agreement including possible international arbitration,” the company said in a statement to the press.
Turquoise Hill said that the impact of these claims could delay the completion of its underground feasibility study if a resolution to the tax matters is not reached before the end of this month.
Oyu Tolgoi is expected to produce 150,000 to 175,000 tons of copper in concentrates and 700,000 to 750,000 ounces of gold in concentrates this year.

Short URL: http://ubpost.mongolnews.mn/?p=10170

Posted by on Jun 24 2014. Filed under Онцлох мэдээлэл. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.

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