FACTBOX-Key political risks to watch in Mongolia
Sat Aug 4, 2012 4:03am GMT
ULAN BATOR Aug 4 (Reuters) - June's parliamentary election proved inconclusive, and the coalition government that is still taking shape is certain to involve parties hostile to foreign mining firms, a move that will worry investors.
The key risk for the mining firms - the engines of economic growth in Mongolia - is that resource nationalist lawmakers, who were the big winners in the poll, exert pressure on the coalition to renegotiate key contracts, and pass legislation to limit foreign ownership of mineral deposits.
The priority for Mongolia is the development of its tiny but fast-growing economy, and foreign investors want to know if the government can create a stable legal environment while pleasing its impatient citizens as well as its two giant neighbours, Russia and China.
Following is a summary of key political risks to watch:
The makeup of the new government will determine the investment climate, and the pace at which Mongolia's huge mineral deposits are brought to production.The coalition, to be led as prime minister by Democratic Party (DP) chief Norov Altanhuyag, will include minority parties such as the Mongolian People's Revolutionary Party and Mongolian National Democratic Party, both of which want to limit foreign investment in the booming mining sector. Continued...
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