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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Mongolian government has withdrawn approval of the agreement as it seeks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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