Mongolia to rescind $100m payment to Khan Resources
Barely three days after Canada’s Khan Resources (TSE:KRI) chairman, Jim Doak, was found dead in a hotel in Mongolia, the country’s ministry of justice revealed it would try to annul a $100 million arbitration claim awarded to the miner last month, FT.com reports.
Doak (59), who appeared as an analyst on business channel BNN, had travelled to Ulaanbaatar to negotiate the terms of the payment granted to his company for the expropriation of the Dornod uranium project back in 2009.
Doak told a Globe and Mail reporter his company had hired an unnamed firm that specialized in collecting delinquent government debts by seizing assets, such as airplanes or ships temporarily located outside the country.
The Toronto-based firm halted negotiations Thursday, after not reaching any agreement with Mongolian officials. Hours later, it learned of the death of its chairman and said, while police did not find any indication of foul play, it would wait for a full autopsy report to be released this week to comment further.
Khan Resources had sought $326 million in compensation for having its mining licenses cancelled by Mongolia and given to Russian producer ARMZ, but the tribunal lowered the payout to $100 million, including interest and costs, based on previous offers made for the asset.
Mongolian Prime Minister Saikhanbileg Chimed has promised to put and end to several high profile disputes with overseas companies, which have pushed investors away and damaged the nation’s economic growth. The Asian Development Bank has forecast a 3% percent expansion for 2015 from 7.8% last year.