April 28 (Bloomberg) -- Mongolia is preparing to overturn last year’s cancellation of 106 mining licenses in a further attempt to revive investor confidence in the mineral rich nation, according to one company stripped of its permit.
The mining ministry has proposed returning the licenses to “compliant” holders, including a “mechanism to compensate for the time lost due to original judicial process,” Vancouver- based Kincora Copper Ltd. said in a statement today.
The licenses, including 11 held by foreign investors, were revoked after the government found they had been issued illegally.
“The Ministry of Mining and government is working to find the best solution for the license holders,” the ministry said in an e-mail. The proposal will still need sign-off from parliament.
The license issue and a high-profile and as yet unresolved spat between the government and London-based Rio Tinto Group over their shared Oyu Tolgoi copper mine are among the disputes that have sapped confidence in Mongolia’s mining industry, curbing foreign investment and economic growth.
“This case has had a major, negative impact on investor sentiment toward Mongolia and the way in which the government responds to investor concerns about the revocation of licenses, we hope, will set a positive and visible precedent as to how future investors will be treated,” Sam Spring, Kincora’s president and chief executive officer, said in the statement.
Earlier this month, Mongolia’s government said it intended to submit two bills to parliament that could stimulate its mining sector and stoke investment. The first would annul a 2010 law suspending the issue of new exploration licenses. The second would amend guidelines applied to a 2009 law on rivers and forests, to allow mining in areas previously off-limits due to environmental concerns.