Source: Business Mongolia                      Date: 21 September, 2010

In a recent interview with a Mongolian daily, Mr. Grant A. Edey, President and CEO of Khan Resources, has categorically asserted that the company has ever breached any laws and regulations of Mongolia. In one instance, the Nuclear Energy Agency charges that the company raised funds in 2007 violated a law passed only two years later. Another accusation is that the company stored drill cores in a specially protected area. “Actually, these had been dumped there by the Russians and we had, in fact, offered to remove them to a safer place,” Mr. Edey said, adding, “We can’t accept these baseless charges.”

Reiterating the company’s intention to exploit the Dornod uranium deposit together with the Mongolian Government and its MonAtom LLC, Mr. Edey said Khan Resources had prepared the feasibility study for the Dornod uranium deposits which estimated that USD337 million in taxes will be paid to the Government of Mongolia in15 years of exploitation. This is much more advantageous to Mongolia than the Russians plan, which will create considerably fewer work places.

He feared that if the Mongolia Government persisted with its possible plans to take over licenses legally owned by Khan Resources to a Russian company, this would lead to Mongolia “losing its reputation” and to rethinking in the world business community about investing. “Who wants to build a house if there is a threat that it could be demolished by the Government at will?” he asked and said a number of  articles have already appeared in the international media critical of the way the Nuclear Energy Authority has arbitrarily canceled Khan Resources’ licenses

The company has begun legal proceedings seeking redress for the damage to its interests and finances resulting from the illegal acts of the NEA and Mr. Edey did not rule suing the Mongolian Government at an international court of arbitration. The company has spent USD20 million in the 14 years it has operated in Mongolia and is computing the losses it will suffer if the licenses remain canceled. These could reach USD200 million. “We are confident that we will win the case,” he said.

Mr. Edey concluded the interview by saying it was clear that the NEA wanted to give Khan Resources’ licenses to the Russians. “Apart from breaching international laws and conventions, this would also mean more benefit for Russia than Mongolia,” he said.