Mongolia’s Supreme Court has ruled against the government’s attempt to nationalise a 49% stake in Erdenet copper mine, industry sources told Reuters on December 8.
The Mongolian parliament voted in February to seize Mongolian Copper Corporation’s (MCC’s) holding in one of Asia’s largest copper mines after a legislators' probe concluded that the $400mn-sale in 2016 by state-owned Russian holding company Rostec to MCC was unconstitutional due to a lack of lawmakers's approval. The Supreme Court delivered its ruling on December 8, effectively restoring to MCC the stake it bought from Rostec.
MCC said it would now turn to international arbitration to seek compensation for the Mongolian government’s alleged breach of international rules of investors’ rights.
“I want to stress that all legal obstacles have been removed involving our shareholding,” MCC’s CEO, Tsooj Purevtuvshin, told the news service.
In a statement issued in London, the company said it had assembled an international legal team led by Omnia Strategy law firm following two days of talks on Dec 4-5 in Ulaanbaatar with government officials, where both sides failed to agree on a deal.
Erdenet produces 530,000 tonnes of ore annuallly and is a top tax contributor to Mongolia's $12bn economy.
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