On December 15, 2015, MIGA issued guarantees of $1 billion to Standard Chartered Bank, for itself and as agent for a consortium of lenders, for their investment in the Oyu Tolgoi mining project in Mongolia. The guarantees are for a period of up to 12 years against the risks of expropriation, transfer restriction and inconvertibility, war and civil disturbance, and breach of contract.
Oyu Tolgoi LLC is located in Mongolia’s South Gobi region. The project involves the development of one of the world’s largest copper deposits. The project is being developed by Rio Tinto, an international mining company. The project enterprise has been granted a 30-year mining license (with the possibility of extensions) that includes the right to explore, develop mining infrastructure and facilities, and conduct mining operations on the project. The government of Mongolia has also entered into an investment agreement with the project sponsor, Turquoise Hill Resources (formerly Ivanhoe Mines Ltd), the Project company, Oyu Tolgoi LLC (formerly Ivanhoe Mines Mongolia Inc LLC) and Rio Tinto.
The development of the mining sector will bring significant benefits for the people of Mongolia and economic development. Key benefits include job generation through indirect and direct employment; revenue through taxation, royalties, and dividends; a demonstration effect for further investment in the mining sector; and the development of supporting infrastructure.
The project is aligned with the World Bank Group’s Country Partnership strategy for Mongolia and with MIGA’s strategic priorities of supporting investments in complex infrastructure projects and into countries eligible for assistance from the International Development Association.