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Mongolia ends its feud with Khan Resources

By K.TUGCHIN

Mongolia has reached an agreement to pay a 70 million USD settlement to Khan Resources to end a dispute over its 2009 cancellation of the Canadian mining company’s uranium licenses in Mongolia. The settlement comes after Khan announced that it would try to put a stop to the issuing of four million USD in Canadian aid to Mongolia.
The payment is expected to be made before May 15, and the Mongolian government has agreed to withdraw its request for proceedings before a Paris arbitrational court to annul a 2015 arbitration award. Mongolia had been seeking to overturn the Permanent Court of Arbitration in the Netherlands’ ruling last March 2015 to pay more than 100 million USD in compensation.
Grant Edey, President and CEO of Khan Resources, commented, “We believe that this agreement is in the best interest of Khan’s shareholders, as it provides a complete resolution of all outstanding matters in a timely manner.”
The Finance Minister of Mongolia, B.Bolor, said, “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. The settlement demonstrates the government’s ongoing commitment to improving the investment climate.”
Khan’s Dornod uranium property was expropriated from the company in 2009 when the Mongolian government passed the Nuclear Energy Law, which stated that “strategic” mines must be 51 percent owned by the government. The government failed to provide compensation, and in January 2011, Khan started legal action for compensation of a minimum of 200 million USD in losses, plus legal fees and interest based on net present value.
Khan Resources released a statement on Sunday, March 6, that it had signed an agreement with the government “whereby all outstanding matters pursuant to the international arbitration award received by Khan shall be resolved and terminated”.
The Dornod property was shown to be economically profitable according to a company feasibility study in 2009. The mine was given to a Mongolia-Russia joint venture company after the Nuclear Energy Law was passed. The mine had been used by the Soviets since 1988, until the Canadian miner took over in 1995.
Analysts believe that the settlement will have a positive impact on Mongolia’s attempts to present a friendly image to foreign investors. “I think it helps their foreign investment case for Canadians and any foreign investor,” Jim Dwyer, executive director of the Business Council of Mongolia, told Reuters.

Short URL: http://ubpost.mongolnews.mn/?p=18760

Posted by on Mar 10 2016. Filed under Business & Economics. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.

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