August 18, 2012 / 9:30 AM / 7 years ago

Mongolia picks resource nationalist Ganhuyag as mining minister

ULAN BATOR, Aug 18 (Reuters) - Mongolia has confirmed resource nationalist Davaajav Ganhuyag as the minister of mining, a move that has sparked speculation over whether the new government intends to review existing mining investment deals for its massive mineral resources.

Ganhuyag, 49-year old chemical engineer and ruling Democratic Party member, previously demanded that some contracts with foreign mining companies in Mongolia be renegotiated to give the state a larger stake in the biggest mines.

He was confirmed by parliament in a late session on Friday.

In 2011, Ganhuyag was one of several lawmakers to sign a letter urging Rio Tinto and Turquoise Hill Resources to renegotiate a 2009 agreement for the $13 billion Oyu Tolgoi copper and gold mine and increase the government stake to 50 percent from 34 percent.

At the time Turquoise Hill Resources was known at Ivanhoe Mines. Under the original 2009 agreement, Mongolia can only increase its share to 50 percent after 30 years.

An analyst in Ulan Bator greeted Ganhuyag’s appointment with caution.

“Ganhuyag is known to investors for having been tough on the Oyu Tolgoi Investment Agreement. However, we view that his position was motivated by a political battle against the government of the time,” Origo Partners analyst Dale Choi, told Reuters.

“Now he is part of the new government himself and does not have to continue with this hardline position. Possibly now he will be bound only by the election platform of the Democratic Party.”

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