Thursday, January 10, 2008

Canada, Mongolia to seek agreement to protect foreign investors

With an eye on the failed Oyu Tolgoi agreement between Ivanhoe Mines and Mongolia, Canada and Mongolia have announced they will begin negotiating a bilateral trade pact to provide protection for foreign investors.

Ivanhoe Mines, along with partner Rio Tinto, had spent five years negotiating with Mongolia over the sharing of profits of the Oyu Tolgoi copper and gold mine. However, the new Mongolian government has withdrawn approval of the agreement as it seeks to increase its shares of profits at the site.

Following China, Canada is the second largest investor in Mongolia with over 20 mining and exploration firms which hold some 400 million dollars in assets in Mongolia.

Canadian Trade Minister David Emerson is currently in Ulaanbaatur as part of an official trip taking him to Mongolia, China and Hong Kong.

Speaking on Wednesday, Emerson said, "Canadian companies are already significant investors in Mongolia and are keen to continue helping Mongolia develop its incredible potential. Our desire to put in place an investment agreement with Mongolia is a clear expression of Canada's commitment to building a strong long-term partnership between our countries."

Downplaying the problems surrounding the Ivanhoe agreement, both governments have stressed that bilateral trade with Mongolia reached $203 million in 2006, an 18 percent increase from 2005.


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