TORONTO (miningweekly.com) – The Mongolian Cabinet has “endorsed in principle” a draft investment agreement for Ivanhoe Mines and Rio Tinto's huge Oyu Tolgoi copper/gold project, Ivanhoe said on Tuesday.

According to a government announcement, the Cabinet conducted its second review of the draft agreement on March 2 and resolved to present the document to the national Parliament for approval.

The Cabinet authorised the Ministers of Finance, Minerals and Energy and Environment and Tourism  “to initial the agreement to be concluded between the government and Ivanhoe Mines Mongolia”, Ivanhoe said in a statement.

The pact requires parliamentary approval before it can be effected, as well as the approval of the boards of directors of Ivanhoe and Rio.

The Mongolian Parliament is currently meeting “in a special session to address budgetary and other national issues arising from the global financial crisis”, Ivanhoe reported.

Rio Tinto and Ivanhoe have been waiting for years for an agreement with the government, which would open the way for the development of what the two companies have touted as the world's largest undeveloped copper/gold project.

In 2007, after five years of negotiations, the Mongolian cabinet approved a draft deal, which would give the government a 34% interest in the property.

The agreement was then being reviewed by a working group, which consisted of Members of Parliament from the parliamentary Standing Committee on the Economy, which was to report to Parliament.

However, Prime Minister Sanjaa Bayar, who was elected in November 2007, withdrew the document for further review, and the process was stalled for much of 2008, partly because of Parliamentary elections held in June , which were followed by the formation of a government of national unity.

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