The Mongolian government has cancelled 106 mining licences as part of a wide-reaching corruption investigation, raising alarm among international investors in the country.
The action follows the accusation of two former government officials of illegally issuing the exploration licenses in 2008 and 2009, reports Reuters. The case was launched as part of a clampdown on corruption in the run-up to the presidential elections in June. Eleven international investors join 67 Mongolian mining firms in feeling the effects.
Kincora Copper announced on November 6 that two licences held by subsidiary Golden Grouse LLC were revoked effective from October 30. The company said that it has been unable to carry out its investment plans in Mongolia due to uncertainty over the investigation.
"Consultations with key third neighbor governments have been ongoing and continue as the affected licence holders work with the government of Mongolia on resolving this situation. The Mongolian National Mining Association ("MNMA") is also assisting where possible," Kincora's statement said.
The Mongolian ministry of mines has not yet made any official statement. Concern has been growing among international investors over resource nationalism in Mongolia, although the re-election of President Tsakhia Elbegdorj - defeating nationalist candidate Badmaanyambuu Bat-Erdene - has helped soothe some of the greatest worries.
Since then, Mongolia had reformed the controversial Strategic Entities Foreign Investment Law (SEFIL) law to make it less restrictive for foreign investors. There are also indications that the ongoing dispute between the Mongolian government and international mining giant Rio Tinto over the second phase development of the Oyu Tolgoi copper-gold mine may be resolved by the end of the year.
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