The Constitutional Court has opened a case to investigate and resolve the dispute regarding the ownership of Erdenet Mining Corporation, in response to multiple formal complaints filed with the court.
On February 10, Parliament approved a resolution to nationalize Erdenet Mining Corporation, following a probe that wdeclared a 400 million USD transaction with private investors to buy Russia’s 49 percent stake in the company to be illegal and financed by illegal loans.
The resolution invalidated an earlier government decision that authorized the sale of 49 percent of both Erdenet Mining Corp. and Mongolrostsvetmet LLC to Mongolian Copper Corporation.
“Mongolrostsvetmet’s 49 percent stake in Erdenet Mining Corporation was never owned by the Mongolian government. By nationalizing the 49 percent that was bought by a foreign country, Parliament and Cabinet have violated property rights and the Constitution,” read a statement sent to the Constitutional Court.
The court has conducted preliminary probes into the matter, and has determined that Parlia-
ment’s resolution to nationalize the mine is potentially in violation of six sub-articles in the Constitution. These include specific articles regarding ownership, such as Article Five, subsection three, which states, “The State shall recognize any forms of public and private property, and shall protect the owner’s rights by law.”
The Constitutional Court also cited Article 16, subsection three of the Constitution as another potential violation committed by Parliament. The subsection states, “Illegal confiscation and requisitioning of the private property of citizens shall be prohibited. If the State and its bodies appropriate private property on the basis of exclusive public need, then there shall be [fair] payment for compensation and cost.”
According to analysts, depending on the court’s interpretation of the specific articles and how they tie into the dispute surrounding Erdenet, Mongolian Copper Corporation could be given back their stake in EMC or receive compensation.