mongolia

Mongolia’s Tax Authority has accused Rio Tinto’s (ASX, LON, NYSE: RIO) unit in the country of evading taxes and penalties payments related to the $6.6 billion Oyu Tolgoi copper and gold mine.

With an abundance of minerals and one of the world’s fastest growing economies, Mongolia is a hotspot for mining companies. But, lawmakers are struggling to ensure the environment doesn’t pay a heavy price.

Mongolia is over four times the size of Germany, with nearly 3 million inhabitants and a GDP of $10 billion (€7.5 billion) in 2012. British-Australian mining corporation Rio Tinto employs 71,000 people in more than 40 countries and is worth about $60 billion.

In a daring act of fraud that has the potential of jeopardising his re-election in the June 26 presidential polls, Mongolian President Tsakhiagiin Elbegdorj and associates ingeniously duped a South Korean investor.

James Passin controls four companies listed on the Mongolian Stock Exchange — in coal, fluorite, and real estate — as well as an undisclosed number of private enterprises.

Mongolia, hoping to arrest a slide in foreign investment into its critical mining sector, is planning a new law that it says will increase stability by reassuring investors.

Government House, Mongolia’s President Tsakhia Elbegdorj delivers a televised speech that simultaneously warms his people and chills foreign investors.

Mongolia has for centuries been characterised as a nation of nomads and cattle herders, but this is all changing thanks to a huge new copper and gold mine.

Concerns are mounting over draft legislation being considered by Mongolia’s parliament that would place severe restrictions on foreign ownership and greatly increase state control over mining and exploration companies.