The Mongolian government is discussing possible changes to a 2009 investment agreement for its massive copper-gold deposit at Oyu Tolgoi, media reports quoted the country's Finance Minister S. Bayartsogt as saying on Tuesday.
The 2009 deal gave 66 percent of the multibillion dollar Oyu Tolgoi project in Mongolia's South Gobi region to the Canadian miner Ivanhoe Mines, now 46.5 percent controlled by Rio Tinto.
Interviewed by Mongolian news portal www.news.mn, the minister said the country's Standing Committee on Security and Foreign Policy was currently discussing changes to the terms and length of the agreement.
No other details were given, but a group of lawmakers have recently urged the government to raise the country's stake in Oyu Tolgoi to at least 40 percent from 34 percent now, saying Ivanhoe's profits were too high.
Investors have expressed concerns that Mongolia's mining boom could be slowed as a result of ill-conceived populist policies.
The completion of the Oyu Tolgoi investment agreement in 2009 was contingent on the annulment of a controversial windfall tax on mining profits set by lawmakers two years earlier.
Cameron McRae, chief executive of the Oyu Tolgoi project, told a conference in Ulan Bator earlier this month that Mongolia needed to honour the previous agreement.
If even a few voices call for Mongolia's commitments to be broken or agreements to be changed, there is a risk that this will undermine investor confidence, he said.
McRae said Rio Tinto had already spent $3.6 billion on the construction phase of Oyu Tolgoi, which is expected to produce 460,000 tonnes of copper a year by 2019.
Remember that $7 billion will have been spent before the first truckload of concentrate leaves our site. Oyu Tolgoi's investors needed the investment agreement to have the confidence to invest such mammoth sums.