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Thursday, June 26, 2014
Turquoise Hill Files Dispute Against Mongolian Govt Over Tax Row
By Michael Kohn
June 26 (Bloomberg) -- Turquoise Hill Resources Ltd. files notice of dispute against Mongolian govt over claims it has unpaid taxes, penalties and disallowed entitlements associated with its Oyu Tolgoi mine, according to statement
* Filing is first step in resolution process and includes a 60-day negotiation period: statement
* Dispute can move to international arbitration if parties are unable to reach resolution during negotiation period: statement
* Turquoise Hill “strongly disagrees” with claims in an audit report that requires payment of taxes and charges: statement
* Further investment in the development of the underground expansion of the mine depends on resolution of tax claims and other outstanding shareholder issues: statement
* Distribution of feasibility study on underground expansion delayed as a result of dispute: statement
* Note: Disputed amount about $130 million
Notice of Dispute Filed With the Government of Mongolia
VANCOUVER, BC--(Marketwired - June 26, 2014) - Following receipt of an audit report from the Mongolian Tax Authority claiming unpaid taxes, penalties and disallowed entitlements associated with the initial development of the Oyu Tolgoi mine, Turquoise Hill Resources today announced that a notice of dispute with the Government of Mongolia has been filed.
The Investment Agreement outlines the dispute resolution process. The filing is the first step in that process and includes a 60-day negotiation period. If the parties are unable to reach a resolution during this period, the dispute can be referred to international arbitration.
Turquoise Hill is of the firm view that Oyu Tolgoi LLC has paid all taxes and charges as required under the Investment Agreement and Mongolian law and strongly disagrees with the claims in the audit report.
Outstanding shareholder issues, including tax claims, must be resolved before further investment in the underground can proceed. Consequently, distribution of the underground feasibility study will be delayed.
Room #5, Coffice Hub, 5th Floor, Time Center
21 Baga Toiruu Street, Sukhbaatar District 8
Ulaanbaatar, Mongolia 15160
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