Ivanhoe, Rio agree to change provisions of their agreement

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Ivanhoe Mines Ltd., seeking to build the Oyu Tolgoi copper and gold project in Mongolia with Rio Tinto Group, may consider selling up to a 9.9 percent stake in the company after being approached by sovereign wealth funds. Ivanhoe and Rio agreed to change provisions of Rio’s agreement to invest USD2.4 billion in Ivanhoe to allow a sale, the Toronto-based company said on Wednesday in a statement. Any sale will not affect Rio’s accord to buy a 43.1 percent stake in Ivanhoe, the statement said.
“Several sovereign-wealth funds are among potential investors who have expressed unsolicited interest in participating in Ivanhoe’s growth opportunities,” Ivanhoe President John Macken said in the statement without specifying them. “Ivanhoe Mines and Rio Tinto also have agreed to cooperate in considering potential investments in Ivanhoe by one or more strategic shareholders,” the statement said.

Rio, based in London, has also agreed with Ivanhoe to change their accord to allow it to delay the October 27 deadline for the second stage of its planned investment in Ivanhoe. The deadline will be delayed in 30-day increments until “either until the completion of an approved, unconditional investment agreement for Oyu Tolgoi, or until April 27, 2010,” the statement said.

“Rio Tinto is committed to its partnership with Ivanhoe in developing Oyu Tolgoi,” Mr. Bret Clayton, Rio’s chief executive of copper and diamonds, said in the statement. “We have made good progress with the Government of Mongolia and expect to sign the investment agreement shortly.”
Source: Bloomberg.com
An Ivanhoe Mines news release dated September 22, reaffirming its long-term commitment to the three-year-old strategic partnership with Rio Tinto and detailing their present agreement to fine-tune two provisions in the 2006 private-placement agreement, can be seen at BCM Website, Articles/Reports on Mongolia

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Total reform movement
2009-09-26 12:14:20
AN ALERT LETTER ATTN: shareholders of Ivanhoe Mines Limited Co. and Rio Tinto International Holdings Limited Co., and the international community concerned about the impact of mining on the environment and ecology About 50 representatives of 22 civil society organizations and individuals met today at the Puma Imperial Hotel in Ulaanbaatar to discuss the most recent version of the proposed investment agreement with Ivanhoe Mines on Oyu Tolgoi. The participants expressed concern over the Mongolian government�s haste to formalize an investment contract, which has numerous weaknesses as specified below by economists, scholars, engineers, legal and development professionals. Taking into consideration the fact that: 1.The legality of the mining license itself is an issue that has been under discussion since 2005. According to which the exploration license for Oyu Tolgoi has been purchased by Ivanhoe Mines Limited Co. from BHP Minerals international exploration inc at the time when by law it would have been expired as the seller had not applied, nor paid the fee for extension of the license. ACTION: Meeting appointed persons/entities to file a case with the Administrative Court for a judicial ruling on the issues surrounding the exploration of BHP Minerals international exploration inc�s exploration license, its extension and purchase of the exploration license for Oyu Tolgoi by Ivanhoe Mines. 2.An environmental impact assessment has not been carried out formally as required by international standards for a minerals deposit of this magnitude in a fragile eco-system such as the Gobi Desert. Regardless of what the Mongolian government requires or does not require, Ivanhoe Mines and Rio Tinto have the obligation under international conventions as well as their own CSR policies to carry out a full and detailed environmental impact assessment. ACTION: The meeting reiterated the call from meetings of environmental NGOs to the government to amend the laws on land, minerals and mining to require an environmental impact assessment before a mining/exploration license is issued and agreed join efforts to demand a formal international standard environmental impact assessment and/or an audit in the Oyu Tolgoi region. 3.The Ivanhoe Mines� statement of investment implemented to date keeps changing with every new draft of investment agreement and the deep suspicions it brings about in the absence of technical feasibility study the meeting concluded that a drastic measure is required. ACTION: Meeting agreed to send a letter to the government and political parties demanding an independent audit of investment in the Oyu Tolgoi mine to be carried out before the agreement is signed.
Total reform movement
2009-09-26 12:15:49
4.The feasibility study has still not been completed and submitted to the authorities as required by the Law on Minerals. ACTION: The meeting reiterated the position of the mining engineers and professionals that the government should not proceed with the signing of an investment agreement in the absence of a feasibility study. 5.A constitutional debate initiated by several citizens L. Tsog and B. Lhagvajav regarding constitutionality of the Law on Annulling the Law on Windfall Tax and amendments to the Law on Corporate Tax. The claim of the petitioners that law amendments were designed to fit the needs of the investment agreement for Oyu Tolgoi have been ruled by the Constitutional Court as violation of legislative due process as were submitted by government in haste. ACTION: Continue constitutional debate on these and previous 2006 amendments to the Minerals Law, package of tax laws determined as unconstitutional by the Constitutional Court Decision #06 dated May 22, 2007. Information: the proposed investment agreement is based principally on the �Minerals Law of Mongolia� enacted in 2006, the legitimacy of which is still largely questionable. In March 2007 the Constitutional Court has ruled that several provisions in the �Minerals Law of Mongolia� were enacted unconstitutionally. Other provisions of the law (ss. 5.4-5.5) are currently being reviewed by the Constitutional Court of Mongolia, for the third time, for contravening the Constitution. While negotiating the contract, government authorities of Mongolia have made several steps that contravened the Constitution and other relevant laws. The latest example was the unlawful revocation of the �Law of Mongolia on the Windfall Tax� and unlawful enactment of the amendment to the �Business Entity and Organization Income Tax Law of Mongolia� (Corporate Tax Law). 6.The working group appointed by the meeting has delivered a statement to the Mongolian Peoples Revolutionary Party and Democratic Party�s national leadership councils meetings held on September 25, 2009. The statement called upon the two parties to reconsider the decision to proceed with the investment agreement, which does not protect the interests of Mongolia as well as violates many law provisions and principles of fairness and sovereignty of a nation over its natural resources. A 34-item list of issues and problems identified by professional and the civil society organization was enclosed to this statement. The statement also called upon the MPRP to reconsider its plan to nominate Minister T. Zorigt to run for parliament as this public official is in conflict of interest as he led the government team negotiating, preparing and submitting the proposed investment agreement. The �Civil Code of Mongolia� specifies that any contract �that breaches the law� (s 56.1.1), contract �based on serious misleading� (s 58), contract �concluded as a result of fraud� (s 59), and contract �made forcibly� (s 60) is not enforceable. We would like to remind again, that the Constitution of Mongolia states that the Mongolian state will not be bound by international treaties and documents which conflict with the Constitution of Mongolia. The Mongolia public will not tolerate or bear the consequences from the acts of corrupt officials. We highly esteem your companies as important allies in extracting and processing Mongolia�s abundant mineral resources. Thus, we request that as a shareholder you encourage your companies to work with us under the principles of transparency, fairness, law and order to revise the impending contract to ensure a lasting and reliable partnership. Ulaanbaatar, Mongolia 2009-09-25
@ "total reform movement"
2009-09-26 18:28:57
Where do you guys live? On the Moon??? Get real. Ridiculous.
just a thought
2009-09-28 00:19:51
The conflict of interest part seemed, well...........of interest. Those politicians in Mongolia don't try to do things dirty do they? Never mind any of these sceptics and critics. They are just observers (from the moon). I mean, who would think. That any deal involving millions of dollars and lots of politicians would have any bit of rush, loopholes, underhanded motives or other that allows for a disrespect of the people/land they are supposed to serve? Outrageous. I mean just look at the past record of politics in Mongolia and the evdence is...well... ummm...hummm....then again... ...wait I see something in my crystal ball...my crystal ball tells me...the sale of SUVs in MGL will increase after this OT deal is done. One action I did not notice in the meeting mentioned by "reform movement". The requirement for those MPs and other key government figures to be board certified as Proctologist before "bending over" their country. Power to tha S1W...Flave Out...
justice
2009-10-02 20:01:01
Latest news please, this site is so outdated.