Mongolia still open to foreign investors

Mongolia is still open to foreign investment despite a hastily enacted law that subjects foreign investments to government approval and recent calls by some nationalist politicians to renegotiate the terms of a mega copper mining deal with Rio Tinto, a senior government official said.

The country was still keen to co-operate with foreign investors, Nemekhbayar Enkhbayar, the head of economy, finance and investment of the Ministry of Mines, said on the sidelines of an investment seminar in Hong Kong yesterday.

"Our basic policy is to co-operate with the world. We have no intention or policy to restrict foreign investment," Enkhbayar said. "Our government just wants to know what kind of companies are coming to Mongolia."

He called a law enacted in May, which subjects deals above US$75 million and those where foreign firms buy more than 49 per cent of an asset to government approval, a kind of "registration" and vetting rather than a restriction.

The law was drafted following alarm over Aluminum Corp of China's announcement that it was bidding for a 60 per cent stake in Mongolian coal miner SouthGobi Resources.

After that announcement, Ulan Bator threatened to withdraw SouthGobi's operating licences. The government told SouthGobi its licences were in good standing only a few days after Chalco withdrew its bid in September, but the few months of uncertainty caused a loss in sales for SouthGobi.