In 2005, Ivanhoe’s Robert Friedland’s infamous statement about the huge profits to be made in Mongolia at an investor conference in Florida delayed his deal with the Government of Mongolia over one of the biggest copper deposits in the world, Oyu Tolgoi (OT).
Like many other democracies, political parties and politicians attempt to build up their profiles for upcoming elections in Mongolia – they often attempt to distinguish themselves from the ruling government. The next parliamentary election is scheduled in June, 2012. Following this logic, 20 members of the Mongolian Parliament issued a petition to the Prime Minister to demand the implementation of the parliamentary resolution that allowed the government to conclude the stability agreement with Ivanhoe and Rio Tinto. [Unuudur Newspaper, September 28, 2011]
However, Rio Tinto’s country director and chief executive Cameron McRae’s statement in the Australian on September 12, 2011 provided a golden opportunity for Mongolian parliamentarians to rally publicly. Although the piece was originally titled “Rio Tinto Warns Mongolian Politicians Not To Be Greedy,” it seems that the newspaper then reworded the title as “Warning on Mongolia’s Minerals Regimes” as the investors demanded corrections. The original title can be found in several Mongolian blogs, for example, Business Mongolia.
Following this news article, several parliamentarians representing the 20 Mongolian MPs, who issued a petition to the Prime Minister, made statements that Cameron McRae intervened in an internal matter (politics of sovereign nations, rights of Mongolian parliamentarians) and even threatened OT to disclose any hidden deals with other Mongolian politicians.
In response to MPs call, A. Munkhbat, an OT Vice President, denied Mr. McRae’s statement and stressed that the journalist of the Australian acknowledged his mistake of disseminating wrong information at a press conference on September 29, 2011. [OT Media Release, September 29, 2011].
If one ignores this bickering, the Mongolian government is in negotiation with Rio Tinto and Ivanhoe following the petitions of the 20 parliamentarians and directives of the Standing Committee of Foreign Affairs and Security of the Parliament, according to Minister of Mineral Resources, Zorigt [Press Release, Government of Mongolia, September 21, 2011]. And, Ivanhoe and Rio Tinto expressed their unwillingness to re-negotiate the terms of the 2009 agreement.
Obviously, the Prime Minister would respond to the petition of the 20 members after their negotiation with the Rio Tinto and Ivanhoe. But, Mongolian politicians and the media apparently over-reacted to a presumed news item in the Australian – which almost made local politics global and OT a hostage of domestic politics as in the past – when Friedland’s casual comments in Florida resonated in Mongolian politics.