Robert Friedland talks up Mongolia partnership

Vancouver – Ivanhoe Mines (IVN-T, IVN-N) Chairman Robert Friedland says he can see the advantages of partnering with the government of Mongolia as the company works to develop the massive Oyu Tolgoi copper gold project.

“There is a lot of benefits to bringing a government into a project and a lot of interesting and creative ways in which that can be achieved,” Friedland said during a speech to the Roundup 07 exploration conference in Vancouver.

Friedland was speaking in Vancouver for the first time since Ivanhoe signed a partnership deal in October, 2006, that would see Rio Tinto (RTP-N, RIO-L) making an initial investment of US$303 million and up to US$1.5 billion provided certain conditions are met.

The key condition is that representatives of Rio Tinto and Ivanhoe reach an investment agreement with the Mongolian government to develope what is expected to be the world’s largest copper mine. With an underground production rate of 200,000 tonnes per day, it will exceed the largest mine in Chile.

Approximately 75% of Rio’s investment is being withheld until an investment agreement is signed.

However, now that negotiations have formally begun, Mr. Friedland said he wanted to clarify the impact of changes to the Mongolian mining law, which he said have not been well explained by the media.

Among the beneficial aspects of new law is the fact that it extends the life of any investment agreement to 30 year. “That’s twice as long as under the old law and is much more appropriate for a project of this scale,” he said.

While the Mongolian government has an option to acquire stakes in strategic deposits, Friedland said this may not such a bad thing, “especially when the government is your regulator,” he said. “This enables them to think as a shareholder as well as a regulator.”