Turquoise Hill to challenge Mongolian tax claims over Oyu Tolgoi development


Turquoise Hill (TRQ) says it has filed a notice of dispute with Mongolia's government following a recent audit report which claimed unpaid taxes, penalties and disallowed entitlements connected with the initial development of the Oyu Tolgoi copper mine.

TRQ says it has paid all taxes and charges required, and that it "strongly disagrees" with the audit report.

Next comes a 60-day period during which a settlement could be negotiated; if that fails, the dispute could be referred to international arbitration , a process that could add to the often delayed Oyu Tolgoi project.

Rio Tinto (RIO) owns 50.8% of TRQ.

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Comments (2)
  • marpy
    , contributor
    Comments (1686) | Send Message
     
    An interesting and (for the investor) frustrating situation to say the least. The country is in a desperate state as foriegn currency reserves are dangerously low, foriegn investors stay away, the local currency keeps dropping in value and the government keeps proving it can not be trusted. Mongolia has also lost every case where it has been taken to world courts and this one if it gets their should be no different. Rio Tinto has the upper hand here as if need be, they can afford to wait it out (next election is in 2016 and the current GOM has a disastrous record and should lose. The prior MPRP government was far more business friendly and should get back in. Until then, TRQ can keep producing from the open pit and continue to pay the bills. JMO from having followed the situation for past 10 years.
    26 Jun 2014, 10:17 AM Reply Like
  • Artistes
    , contributor
    Comments (18) | Send Message
     
    It seems as though the individuals in the GOM are trying to squeeze as much as then can out of the situation. Is it going into their pockets, or is it legitimately going to GOM (assuming they win any kind of concessions)? Everything in that part of the world usually involves some sort of kickbacks. Seems like this is part of doing business in Asia. So how much do they want and is it worth it to hold up going forward?
    26 Jun 2014, 11:53 AM Reply Like
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