The Mongolian Copper Corporation (MCC) announced Wednesday it received a payment of $153.5 million from the Mongolian government for the Erdenet and Monros mines.
The payment stems from a longstanding dispute surrounding the 49% ownership of the Erdenet and Monros mines, which MCC purchased in 2016 from Russian company Rostec.
“The move honors Parliament’s resolution and the decision of the Constitutional Court which concluded that MCC must be compensated for the amount it paid for the shareholding in the mines,” the company said in a press release.
MCC said it continues to work with the government to settle the outstanding balance by the end of the year.
Erdenet, which produces 530,000 tonnes of ore annually, is one of Asia’s biggest copper and molybdenum mines and a top tax contributor to the country’s $12 billion economy.
Erdenet and Monros were originally joint ventures operated by the USSR and the Mongolian government.
In 2015, MCC approached Rostec to explore the idea of acquiring its shares in the mines, and throughout 2015 and 2016 negotiations progressed.
In June 2016, the government issued a resolution, by which it waived its pre-emption right to purchase Rostec’s shareholding in Erdenet and Monros.
In June 2016 MCC purchased Rostec’s shares in Erdenet and Monros for $400 million, but in 2017 authorities announced that MCC’s shareholding in Erdenet would be transferred to the government and that it was not within the power of the government to waive its pre-emption rights.
A lengthy legal dispute took place, which culminated in a ruling from the Constitutional Court of Mongolia in February 2018 that MCC must be compensated for the amount paid to Rostec for the shareholdings in the mines.