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Ivanhoe gains 13% after Mongolia backs down on Oyu Tolgoi

Shares of Ivanhoe Mines (TSE:IVN) and Rio Tinto (ASX:RIO) both gained today on news that Mongolia has backtracked on a demand for a greater share of the massive Oyu Tolgoi copper-gold complex.

Rio was up 4.94% on the ASX while Vancouver-based Ivanhoe jumped 13.06% on the Toronto exchange.

The two companies and the government of Mongolia issued a joint release yesterday saying that all parties have “reaffirmed their continued support” for the 2009 Oyu Tolgoi Investment Agreement.

The statement ends two weeks of tumult for investors, in particular owners of Ivanhoe stock, who had to endure a 21% crash in the stock price at the end of September after the company failed to reassure the markets that the Mongolian government was not going to renege on the deal that Ivanhoe and Rio spent five years putting together.

Mongolia was demanding to increase its stake in Oyu Tologi from 34% to 50%. Ivanhoe and Rio, having spent $2.6 billion to construct the mine to the half-way completion point, refused to renegotiate.