Mine Web reported that Mongolia, the commodity rich nation that posted the world's fastest economic growth in 2011 is on course to pass a law by June that will bar foreign state owned companies from controlling its key assets.

Mr Ganhuyag Chuluun Hutagt vice finance minister of Mongolia said that the draft law, submitted to parliament two years ago, was accelerated after a public outcry following state run Aluminum Corporation of China Limited's move last month to take control of SouthGobi Resources Limited. The law isn't likely to apply to any existing operations. Rio Tinto Group is developing the USD 6 billion Oyu Tolgoi copper mine in the nation.

Mr Ganhuyag said that tightening the legislation would mean Mongolia joins Indonesia and Argentina in seeking to control ownership of resource assets to secure their economic future. The draft law due to be passed before parliamentary elections next month will be applied to the bid by Chalco, as Aluminum Corporation is known and is aimed at ensuring no one country or product dominates the economy.

Mr Ganhuyag said that Mongolia, a nation of 2.8 million people that broke off from Communist rule and dependence on the then-Soviet Union in 1990, wants foreign investment in key assets to be made by entities that represent several nations. The country currently exports most of its coal and copper to China.

He said that we don't want to be faced with one sovereign. Our struggle to get political freedom was a long one and we cherish that. We will not let foreign government-owned entities control strategic assets in Mongolia.

Mr Dale Choi chief investment strategist at Frontier Securities in Ulan Bator said that "Investors don't like it when the rules of the game are changed after the game has started, and changed often at that. It would be in the interests of Mongolian people to make a decision based on commercial factors rather than geopolitical factors.

Source - Mineweb.com

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