NEW YORK - Ivanhoe Mines CEO John Macken (TSX:IVN) has welcomed assurances from Mongolian Prime Minister Sanjaa Bayar that his government supports foreign investment and the construction of the company's Oyu Tolgoi copper project.
Along with its partner on the project, Rio Tinto, Ivanhoe reached a draft agreement with the government in April to stabilize tax and fiscal issues and guide the development and long-term operation of the project.
That deal was reviewed by Mongolia's cabinet in June and it was put before the country's national parliament.
But since the formation of a new cabinet under Bayar, who was elected chairman of the Mongolian People's Revolutionary Party late last year, the cabinet has again taken over review of the deal.
Macken issued a statement Tuesday from New York, where he addressed an investors conference, that said Ivanhoe had received a letter recently from Bayar that said his intention was to see construction of the Oyu Tolgoi project start prior to the Mongolian general election in June this year.
An excerpt from the prime minister's letter said:
"I would like to reiterate that my Government will continue to support private investment, including foreign investment, and intends to see the projects such as Oyu Tolgoi, that not only have a significant impact on the development of the country but also largely shape the perception of its investment environment, commence during its term in office."
"The presence of strategic investors, which are well known in global industry, in the Oyu Tolgoi project is considered by the Government as an important factor for its long-term success and their intention to be committed to the project...is encouraging."
Canadian International Trade Minister David Emerson goes to Mongolia on Wednesday following an official visit to its neighbour, China.
"I will be raising the Ivanhoe project issue," Emerson said Tuesday in Beijing.
"The fundamental rationale for going to Mongolia is that we have a substantial number of Canadian mining companies that are involved in Mongolia, there are legal and regulatory issues there. We want to work with our companies and the government of Mongolia to ensure that Canadian companies are operating there with social responsibility as a prominent element of what they're doing."
Ivanhoe shares traded Tuesday at $11, up 28 cents, at the Toronto Stock Exchange.