Previously www.InfoMongolia.com reported that the Ivanhoe Mines has reached negotiations with the Chinese state-owned "Chalco", subsidiary of the Aluminum Corporation of China, to sell its 57.6% shares of the SouthGobi Sands LLC
, a wholly-owned division of SouthGobi Resources LTD who holds exploration and mining licenses on the Ovoot Tolgoi coal mine site, located in Umnugovi
The Ministry of Finance of Mongolia made a statement warning that the Government of Mongolia will receive not even a single penny from tax levy if the purchase deal between SouthGobi Sands and Chalco comes into force. Hence much ruckus was caused in Mongolia concerning the deal
and through what loophole in the law the foreigners slipped to make such an agreement.
Also, the temporary Director General of the Mineral Resources Authority of Mongolia M.Ariunbayar announced a statement during the press conference, held yesterday on April 16, 2012. In the statement Director General M.Ariunbayar said, "Mongolian Law on Mineral Resources has no powers to regulate this deal, but draft legislation on Restricting Foreign Investments in the Strategic Sectors has been initiated which enables to regulate such deals. All special licenses issued to the SouthGobi Sands were suspended temporarily, following the trade deal of SouthGobi Recourses to tender its 57.6% controlling interest in SouthGobi Sands to Chalco. The suspension will be valid till the Government of Mongolia reviews the matter and draws relevant conclusions. The Mineral Resources Authority of Mongolia grants a license thus it also has a privilege to suspend it. Whatsoever, the Authority has suspended the licenses
until an injunction by the State Great Khural (Parliament) and the Government. As of today, 100% foreign invested companies hold an estimated number of 790 special licenses in Mongolia. We shall approach such matters with care concerning restricting strategic investment of foreign state owned companies”.