Korea Zinc pulls $1.8 billion share sale plan after probe
The world’s largest zinc smelter has been caught up for months in a fight between its largest shareholders over strategy and direction.
The remote Dornod uranium project in northeastern Mongolia. (Image courtesy of 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.
Canada’s Khan Resources chairman, Jim Doak, was found dead in a hotel in Mongolia last week.
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.
Dornod uranium project location.
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.
9 Comments
Baatfarka
Well,
Seems a little suss does it not? Confront the government
about the $100 million they owe you, threatened to take some of their toys
away, and suddenly you’re dead.
Seems our brothers have learnt a thing or two from their
northern neighbors?
Strange things are afoot at the Circle K Ted, as Bill
once said!
BF
Jan Hood
Ferris,
Lets see! Mongolian police investigating Mongolian government officials re a fatality in Mongolia.
Not a lot of credibility! How many miners are going to cross Mongolia off their list?
Ikh
Death under mysterious circumstances is nothing new in Mongolia, in fact, historically it is the norm (e.g. Suhkhbaatar, Shchetinkin, etc.).
So why should anyone be surprised that this “nation” which is busily reverting to the past, now may also be resorting to the ways of old?
Mongolians have shown themselves to be savage, unprincipled, and ruthless; it will continue to nuke itself back to the Stone Age. Why would anyone want to go there, let alone invest?
Abandon hope all ye who enter there…
Matt
Good luck with the Russians, Mongolia. Oh about that EPA thing, don’t worry that. There won’t we anything but antiquated methodology and equipment in operations.
Honheree
I hope the full autopsy will take place in Canada, NOT MONGOLIA, as it is extremely suspicious, let alone coincidental that he was in negotiations with the Mongolian government. Seeing the Russians got the uranium licences I would bet their hands are involved in it. They are well known for this type of thing.
Kenneth Viney
Why would an investor go there. Only to see his shareholders lose? In this case more than the $300 million. Give your Canadian head a serious shake or two.
Peter K
What is an appropriate discount rate for the cost of capital in Mongolia? Presumably starts at around 25% and goes up to over 50%, based on subjective thought rather than science, no project is going to meet the hurdle requirements… and no… your project isn’t different because the CEO has special relations, or the local partner is strong, or you’ve had assurances…. its a breach of fiduciary trust to take TSX (or ASX or LSE/AIM for that matter) money and invest in this country.
RLZ
Kahn was working in that country since 1995 and had no reason to believe that it would pull this stunt. Russia walks in and bullies it and that is the end of the agreement. I now believe, with the info age, Mongolia has now severely blacklisted itself from the free world. All evil countries, ie. those who don’t care about other’s borders, will be able to walk in and bully the country around through its corrupt politicians. The people of Mongolia don’t deserve the slavery they have been in for years. Just makes me sick…
Ichbin EsNicht
Whatever the outcome, Mongolians killed him:
I agree with all the following:
Death under mysterious circumstances is nothing new in Mongolia, in fact, historically it is the norm (e.g. Suhkhbaatar, Shchetinkin, etc.).
So why should anyone be surprised that this “nation” which is busily reverting to the past, now may also be resorting to the ways of old?
Mongolians have shown themselves to be savage, unprincipled, and ruthless; it will continue to nuke itself back to the Stone Age. Why would anyone want to go there, let alone invest?
Abandon hope all ye who enter there…
Many foreigners are being killed in Mongolia when Mongolians steal their businesses.
Or check out the case of Justin Kapla. Luckily, he made it out alive: http://www.fox9.com/news/1564143-story
I barely made it out alive after my business was stolen by crooked Mongolians.
I lived there for 8 years and I will never ever return there.
Mongolia is no place for foreigners!
Let them go back to the Stone-Age where they belong!