Mongolia Mining Shares Plunge Nearly 18% Amid Government Royalty Agreement

Stock News
Feb 13

Mongolia Mining (00975) experienced a sharp intraday decline of nearly 18%, with losses narrowing to 14.51% by the time of writing. The stock was trading at HK$12.2, with a turnover of HK$259 million. The drop follows reports that Mongolia's Prime Minister Luvsannamsrain Oyun-Erdene has signed preliminary revenue-sharing agreements with several mining companies. Under the agreements, 60% of revenues from mines including Ukhaa Khudag, Nariin Sukhait, Baruun Naran (part of the Tavan Tolgoi deposit), and the Erdenet copper mine will be distributed to Mongolian citizens through a national wealth fund, aiming to fulfill corporate social responsibility and ensure equitable distribution of resource revenues. Mongolia Mining issued a clarification confirming that its operating subsidiaries, Erdenes Tavan Tolgoi and Khushuut, have signed non-binding memoranda of understanding with the Mongolian government. According to the MOUs, the requirement for state ownership in strategic mines will be waived and replaced with special royalties linked to market prices. The Mongolian government will receive 60% of the cumulative economic benefits from the mines.

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