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Mongolia is planning to ease a key restriction on foreign investment by raising by tenfold the size of deals that must be approved by parliament, the nation’s foreign minister said in an interview.
The threshold will be raised to 1 trillion tugrik ($715 million) from 100 billion tugrik, Luvsanvandan Bold said, adding that the decision would please foreign investors hoping to do business in Mongolia.
A statue of Damdin Sukhbaatar who was the leader of Mongolia’s 1921 revolution stands outside the Parliament Building of Mongolia in Ulan Bator on June 22, 2012. Photographer: Mark Ralston/AFP/GettyImages
“Today it will be debated in Parliament,” the minister said. “It will be raised to 1 trillion tugrik. That is the new level that is under discussion.”
Mongolia, in the midst of a dispute with Rio Tinto (RIO) Group over control of the $6.6 billion Oyu Tolgoi copper and gold project, passed a law last May to restrict foreign companies from buying control of assets in industries including mining, telecommunications, media and financial services. The law was created in part as a response to Aluminum Corp. of China Ltd.’s plan to buy coal miner SouthGobi Resources Ltd. (SGQ)
The Strategic Entities Foreign Investment Law requires any deal worth more than 100 billion tugrik involving the transfer of more than 49 percent of a Mongolian company to a foreign group to be referred to parliament for approval.
SouthGobi later came under Rio Tinto’s control after it took a majority stake in its parent company.
To contact the reporter on this story: Michael Kohn in Singapore at mkohn5@bloomberg.net
To contact the editor responsible for this story: Andrew Hobbs at ahobbs4@bloomberg.net
