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Mining executive deaths in Mongolia (from IKN311)

Here's a short piece from yesterday's Weekly, IKN311


Mining executive deaths in Mongolia
The news that Khan Resources Chair Jim Doak had died while on a business trip to Mongolia was another in the line of death news out of the Canada mining industry last week (22) but as A. Reader with a memory pointed out, it's not the first time a Canadian mining executive has met their fate while in that country. Mr. Doak was in Mongolia to demand from its government the payment due to Khan Resources  after it won international tribunal proceedings against the state. Here's how the Globe & Mail put it:

Khan had been engaged in a prolonged legal battle with the Mongolian government over a uranium project. Last month, an international arbitration panel ruled that the government should compensate the company for cancelling uranium licenses in 2009 and expropriating property where Khan had planned to develop a mine. The company said the compensation award, plus interest, totalled $103.8-million (U.S.) as of the end of March.
Company officials, including Mr. Doak, held talks this week with government representatives in Ulan Bator. During those talks, the company demanded full payment of the award and vowed to take enforcement action.

It's interesting (I think that's the word) to compare the untimely death of Mr. Doak to a case in 1999, when one Armand Beaudoin died of an apparent heart attack while in Ulan Bataar, Mongolia (23) (24) (25). The mining prospector, mover and shaker Beaudoin was in dispute with the government of Mongolia over a resource deal. According to an anecdotal (though wholly reliable) report supplied to your author last week, once dead of the heart attack Beaudoin's body was dragged out of his accommodation and into a open courtyard by police.

Any resemblance to the fate of Jim Doak, also in Mongolia at the time of his death after looking in good health on BNN TV just a couple of weeks before flying out there, also dead from a suspected heart attack in his hotel room and also while in dispute with the government of Mongolia over a resource deal...well, it's purely coincidental.

However fair is fair and there are differences as well. On checking up, Beaudoin was described to your author as "shady" by more than one person and was apparently mixed up in the Bre-X scandal in the 1990s before coming totally unstuck in Mongolia at the end of that decade. Meanwhile, the recently deceased Mr. Doak had a far better personal reputation in the industry but was also considered a fearless voice and unafraid to ruffle sector feathers. His naked body wasn't put on by public display last week, either. Small mercies.

The Oyu Tolgoi copper deposit, now on the way to being a fully fledged mine, shows the exceptional geological potential of Mongolia and there are many other examples, with gold, uranium and coal deposits being particularly attractive. Miners have been queuing up to do business here since the laws were changed to allow in FDI in 1997, but stop-start resource nationalism moves (sometimes very heavy handed (26)) and near-legendary levels of institutional corruption have remained in place, leaving Mongolia with a Wild West reputation to this day. Those companies betting their future on this country are in a higher risk bracket than most.