And thereby hangs a tale

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
. 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
(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. 

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