Mongolia has passed an important milestone underpinning the core of its
growth for much of the next century, according to a note by ResCap. Any market
uncertainty around Ivanhoe’s Oyutolgoi construction being completed on time has
now been diluted with Rio Tinto stepping forward as the lender of last resort.
The often impatient capital markets were disappointed as Rio Tinto was not
about to launch a takeover with the Ivanhoe share price trading off 14%, but in
what would have only altered focus for construction and shifted attention to
board room discussions around bid price and documentation for six months, it
was an overall clear and simple win for Mongolia.

With Rio Tinto underwriting Mongolia’s growth for the better part of the next century,
the country will see spending of USD4.6 billion in next two years at OT vs.
current GDP of only USD5 billion. With on-site workers doubling to 14,000 in
2011, Mongolia will benefit with further import of skills, training and
development. And with copper climbing over USD4/lb again, it is a mere 730 days
before OT will start to begin “paying back” to Mongolia in an initial but
quickly improving way.