Khan wins in Mongolia
05 August 2010
The political risk story for Khan Resources' efforts to mine uranium in Mongolia took a new turn when the company won a court case against the government to win back its licenses.
Pending appeal by Mongolia's Nuclear Energy Agency, Khan will now move ahead to re-register the mining licenses held by its 100%-owned Khan Mongolia subsidiary and 58%-owned Central Asian Uranium Company.
Those companies were created after Mongolia suddenly introduced new laws that required all uranium mining operations to be at least 51% owned by the state, and revoked previously held licenses for alleged violations.
The Capital City Administrative Court made two rulings that the NEA did not have the right to act as it did: one in favour of Khan Mongolia on 19 July and one for CAUC on 2 August. Khan said the court called the NEA's actions "invalid and illegal" in both cases.
Apart from re-registering the licenses, Khan did not say that it planned to go ahead with the development of a mining operation at the Dornod deposit. The company has also faced a hostile takeover bid from Russia's AtomRedMetZoloto (ARMZ), with which the NEA had wanted to jointly develop Dornod.
The deposit has 24,780 tonnes of indicated uranium resources (compliant with the NI 43-101 standard) plus 20,340 tonnes of probable reserves. Khan had envisaged annual production rates of 1150 tonnes of uranium per year for 15 years.
Researched and written
by World Nuclear News