Ivanhoe Deal Delayed Again

January 2008 | Risk Summary

The Mongolian government has once again delayed the process for signing a major copper and gold investment deal with Canadian firm Ivanhoe and Australian company Rio Tinto . The decision to withdraw a key draft investment agreement from parliamentary review was made by Prime Minister Sanj Bayar, who only recently took over as head of government following the forced resignation of his predecessor. Already, the decision has come under criticism from foreign mining companies and the Canadian government, raising the risk of deterioration in some of the country's key foreign relationships. While we do not believe that this move signals a fundamental shift in the government's policy to foreign investment, it does set a negative precedent for other foreign firms wishing to make big plays in the country's mining sector.

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