17 May Khan Resources to receive $70m from Mongolian government
The government of Mongolia is going to pay $US70 million to Canada’s Khan Resources (TSX:KRI) for repealing a uranium mining licence after a seven year legal battle.
Prime Minister Chimed Saikhanbileg will be taking further steps to improve Mongolia’s relationships and reputation.
The pay agreement comes weeks after the country introduced a new programme aimed to attract mining exploration.
Rio Tinto (LSE:RIO) recently decided to resume work on a $5.3 billion expansion of the Oyu Tolgoi copper mine after a three-year delay from the Mongolian government.
Khan had chased the claim after Mongolia nationalised its Dornod uranium deposit. The firm originally sought $326 million in compensation for the cancellation of its mining licences revoked by Mongolia and given to Russian producer ARMZ.
The tribunal lowered the pay out to $100 million, including interests and costs. Khan and the Mongolian government finally settled on a $70 million payment.
The country’s foreign direct investment dropped to $195.1 million last year from $4.45 billion in 2012.