#mining mongolia

After last month's failed attempt by China's Chalco to buy SouthGobi Resources, Mongolia's parliament has been weighing its options for future investments. Yesterday parliament approved a draft law that would require government review for any foreign investments over 100 bn turgriks (76 million USD) and limit share value to 49%. 

The draft law is a set to be voted on next month and will not apply retroactively to past deals. These measures effectively protect the Oyu Tolgoi project owned by Australia's Rio Tinto, and honor another Chalco deal with Winsway Coking Coal Holding Ltd that was reached a week before its troubles with SouthGobi. 

The government approval comes at tumultuous time as parliamentary elections are still slated for June and Former President Enkhbayar just received bail from his April arrest on corruption charges. The arrest of the former president was released from police custody after going on a hunger strike protesting what he calls a politically motivated arrest. 

The repercussions from the draft law have yet to be seen but at the same time seem stabilizing. Operations at SouthGobi Resources have resumed and investors now have clear guidelines off which to operate. The law defines investments deals made in minerals, banking & finance, or media & telecommunications, as applicable and possible given that parliament approves of deal provisions. The law comes at a time as a compromise on the large, Tavan Tolgoi coal project deal has been stalled since March. 

Hong Kong based Noble Group has formed a partnership with Australia's Aspire Mining, operator of Ovoot mining project in Omnogobi province. 

The international commodities trader Noble Group acquires, manages and transports raw materials to high growth markets, mainly China, India and the Middle East. Earlier this year, Noble partnered with another Australian company, Xandadu Mines, to explore Mongolia for minerals. 

The Ovoot project runs a coking coal plant and Noble will share its marketing expertise in exchange for at least half of the the first 5 million tons of coal produced. The project's largest shareholder, SouthGobi Resources, has previously exercised anti-dilution rights to Aspire in order to retain its 19.9% share . The majority share holder of Southgobi is Ivanhoe mines, led by Robert Friedland.