The profits are not “free”. They are earned and are negotiated with your government.

The question for investors is really simple. Are you people trustworthy, do your contracts mean anything, or are you a bunch of bait-and-switchers? Liars in other words?

YOUR government wanted this investment, and Ivanhoe were heroes when they stayed as everyone else left.

You folks are playing a silly game. Capital can be moved easily, and the money that doesn’t flow to Mongolia because of dumb laws and changing the rules of the game midway through is difficult to calculate.

If it is Chinese and Russian companies you want, then have a it, and good luck.

As for the environmental destruction????????? How about a few photos. Google Earth shows the operation is in barren, unpopulated, hard to reach places, and you can’t see anything except a few structures.

I don’t understand what you are talking about. Mining is the most primitive type of business. It should be taxed that way when market is favorable. Yes, we want foreign invesmtent and expertise, but not one in mining. If you were from Intel or , we wouldn’t or shouldn’t do this. Think about it. And be careful. We might do even more. I am not threatening you. Just to make sure that we both understand each other and that we really don’t simply want to be a mining country.

I am sure your government wanted foreign investment to grow the economy, help build roads and infrastructure, create jobs and EXPERTISE!

DESTRUCTION! If you want to see what destruction is wrought without modernization, here is one example of the destruction of the environment due to the lack of roads: http://www.ias.ac.in/jbiosci/mar2006/85.pdf

Perhaps you would like the Russians and their eco-friendly ways to invest instead of western companies? That’s fine too, as that is the way of Mr. Market. Just be careful of what you ask or demand.

mandukhai:

Businesses are in business to make a profit. Local labor laws are local labor laws,and wages are relative to the region. You don’t see the rural Polish receiving Los Angeles level wages, so why should you expect London type wages in Mongolia? Price efficiencies are why you have companies moving about. Germany is too expensive, so companies pack up and move to Czech, Poland, Hungary, China or India. American unions have out priced themselves from work, as has the ever increasing minimum wage. Countries and companies learn, adjust and move forward.

For your country to attract foreign investment, you need a stable set of rules. Putting in an arbitrary, non-negotiated penalty on profits does not accomplish this. It freaks the investor out, and as the Market is huge, and opportunities enormous, money will flow aay from Mongolia. If that is what you want… OK.

Will there be government assistance when prices plummet? LOL… we know the answer to that one… it’s called tough darts buddy.

Fairness and stability is paramount in the business world, investors will shy away from areas where there is very high perceived risk – which right now Mongolia is considered one. Does it make sense to invest $350 million dollars in a business that will tax the profits at 68%? Well, Ivanhoe mines already did and they are willing to invest another $2B to build out the open pit and underground mines at OT. In hind sight, Ivanhoe would not have invested the $350M if they knew of this new tax.

The implications for any future foreign investor is huge, no other foreign company will spend money to bring a project to commercialization. OT will be mined because of it’s size and high grade ore, but it took a lot of money and time to prove it out. Something no one will give Mongolia in the future with this overhanging 68% tax. Try 40% or some other risk sharing formula. Try a graduated progressive tax approach. or look at how other countries successfully use the mining industry to generate jobs, money, taxes and other benefits.

if you do not make the environment conducive to investors, investors will not come. I hope someone takes a closer look at this otherwise the only mine that will be built in Mongolia for the next 50 years will be Ivanhoe’s.