Ivanhoe Mines and Oyu Tolgoi Project
Ivanhoe Mines (NYSE:IVN) and Rio Tinto (LON:RIO) signed an agreement last week with Mongolia to develop one of the largest and riches copper deposits in the world: the Oyu Tolgoi mine.
This was a long time in coming, as Ivanhoe Mines had began the exploration of Oyu Tolgoi about nine years ago, and six years ago it received mining licenses to go forward.
It has taken so long because of the amount of the stake wanted by the Mongolian government in return for the copper deposits, which Ivanhoe hadn't been willing to work for.
Per the agreement, Ivanhoe offered the government of Mongolia a 34 percent equity stake in the project.
The final sticking point for the deal to move forward was the enormous windfall tax wanted by Mongolia of 68 percent on gold and copper sales. That was eliminated and now the project can start its operations in earnest, with Ivanhoe and Rio Tinto ready to reap the benefits over the years ahead,
This deal could be used by Mongolia as a bellwhether for other mining deals in the future.
Ivanhoe Mines and Oyu Tolgoi Project
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