As you may know, China’s neighbor Mongolia has enormous mineral wealth. Major international mining conglomerates have been there developing the soon to be absolutely enormous mines. The projects are huge on a world scale. However, the Mongolian government, in some sort of misguided strategy is demanding a larger percentage of profits from the companies.

The companies there have already and are in the process of continuing to spend billions of dollars in the development of major mining projects. World level mining production and thousands of jobs are expected to come on line.

We feel that it is foolish and imprudent of the Mongolian government as the previous agreements, in our opinion, were fair and generous. The prior agreed upon tax agreement (percentage) due to the Mongolian government was in line with the standard percentages and actually at the higher end of the scale to the benefit of the government.

Moreover, keep in mind that Mongolia’s small population of three million does not have the required enormous capital necessary to finance the development of the mines. We are speaking of many billions of dollars and Chinese Yuan that are required. They entail enormous capital expenditures. A small country cannot afford the huge expenditures; nor could any Canadian province or American state.

People should keep in mind that whether you are living in a Canadian province or American state, you must recognize that partnerships with the powerful and stronger partner are necessary to allow completion and profitable fruition of major business enterprises.

No person or country should ever be taken advantage of by major corporations and it has often happened in the past. But the agreed upon percentages between the government of Mongolia and the mining companies, in our opinion, are fair to both sides.

We feel that an agreement between the government and the corporations will be found and it will benefit the people of Mongolia, the companies and their shareholders which is the way that it should be. Part 2 to follow.  Thank you, Bob Pellerin and Charlie Grainger