Details of the historic agreement
to allow the development of the Oyu Tolgoi mine by Ivanhoe Mines Ltd.
and Rio Tinto indicate the mining company will have to build a smelting
operation in Mongolia. Also, the mining companies will have to sell
gold extracted from the mine to the Mongolian Central Bank.
Oyu Tolgoi is considered to
be the largest untapped copper and gold mine in the world. 2005 estimates
put the annual yields from the mine at 450,000 tons of copper and 330,000
ounces of gold to be extracted beginning in 2010.
However, the government of
Mongolia and the mining companies spent five years negotiating over
how revenues will be equitably divided.
By creating the smelting operating
in Mongolia, mine officials will avoid paying a 68 percent windfall
profit tax to Mongolia.
The agreement to allow for
the mining of Oyu Tolgoi has been approved by the Cabinet and must now
receive approval of the Parliament.
Image source: http://www.ot.mn/index.php?module=gallery&sec=view&id=287
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