There were reports earlier about the changes brought by the Mongolian government in the existing mining law which is supposed to give a boost to the industry. Although everyone concerned to this industry hailed the decision, still there were some doubts about how much the amendment will help the mining sector.
The major reason for this apprehension was the dispute going on between the government and the Canadian mining company, RIO TINTO over the underground expansion of Oyu Tolgoi copper and gold mine. Government holds 34% of the share in this mine while the rest is owned by the Canadian company.
The dispute has aroused over a number of issues such as cost overruns, employment and pay of Mongolian workers etc apart from the ownership issue. Entire mining industry was eagerly waiting to see how the government will handle the dispute and whether the final outcome will send a positive signal to the rest of the world.
Anyway, the new CEO of the company, Craig Kinnell has taken initiative to solve the issue and he expressed his willingness to talk with the authorities to find out a solution which will not harm the interests of both the parties involved. The meetings are beginning today and the world mining industry is waiting eagerly to know the results.
As Mongolia experienced a sudden fall in direct foreign investment, the government has come up with several modifications in the existing mining laws to bring in more foreign investment in that sector. Mining, being the major source of revenue the government cannot stand rigid on these issues for a long time, say many industry watchers.