TORONTO (miningweekly.com) – TSX-listed Khan Resources has filed for international arbitration against the Mongolian government and is seeking more than $200-million in compensation for losses and damages, the firm said on Monday.
The arbitration action was launched after “expropriatory and unlawful treatment of Khan”, related to the Dornod uranium deposit in the north-east of the country.
The Nuclear Energy Agency of Mongolia announced in November 2010, that it would not reinstate the licences that Khan holds on the Dornod uranium property.
The company alleges that the licences were “illegally” cancelled, so that the State could pursue the project without Khan.
The arbitration will take place under the Arbitration Rules of the United Nations Commission on International Trade Law, and asserts claims under the Energy Charter Treaty, the Foreign Investment Law of Mongolia, and the Founding Agreement between Khan and the Mongolian government.
The claim has been today served on various officials of the government of Mongolia, Khan said in a statement.
"We are disappointed that the government of Mongolia has left us no alternative other than international arbitration,” Khan CEO Grant Edey said.
“The Nuclear Energy Agency of Mongolia continues to falsely denounce us in Mongolia while simultaneously entering into an agreement with ARMZ of Russia for the development of the Dornod deposit, thereby excluding Khan of its rightful interests.”
The company believes it has a strong case of expropriation without compensation, and intends to “vigorously” pursue the arbitration process to its conclusion, he said.