Resource nationalist Davaajav Ganhuyag has been confirmed as minister of mining in Mongolia, igniting speculation over whether the new government will review existing mining investment deals for its massive mineral resources.
Ganhuyag, a 49-year-old chemical engineer and ruling Democratic Party member, had previously demanded the renegotiation of foreign mining company contracts so as to increase the state’s stake in the mines, Reuters reports.
In 2011 Ganhuyag, signed a letter with other lawmakers urging Rio Tinto and Turquoise Hill Resources to increase the government’s stake in the Oyu Tolgoi copper and gold mine from 34 percent to 50 percent. Oyu Tolgoi is a $13 billion mine, with its original 2009 contract stating that Mongolia could only increase its share to 50 percent after 30 years.
Turquoise Hill Resources was known as Ivanhoe Mines at the time of the agreement.
Origo Partners analyst Dale Choi greeted Ganhuyag’s appointment with caution.
“Ganhuyag is known to investors for having been tough on the Oyu Tolgoi Investment Agreement. However, we view that his position was motivated by a political battle against the government of the time,” Choi said, Reuters reports. “Now he is part of the new government himself and does not have to continue with this hardline position. Possibly now he will be bound only by the election platform of the Democratic Party.”