By Steve James

DENVER, Sept 15 (Reuters) - Mine engineers using technology that can identify ore bodies more than 3,000 meters (10,000 feet) underground have discovered new gold and copper deposits below Mongolia's Gobi desert, Ivanhoe Mines (IVN.TO) Chairman Robert Friedland said on Tuesday.

Ivanhoe is using the proprietary "Zeus" technology -- which measures electrical conductivity to locate mineral deposits -- along a 20-km (12-mile) stretch near Ivanhoe's Oyu Tolgoi copper-gold project, he told the Denver Gold Forum industry gathering.

Meanwhile, Ivanhoe is awaiting final approval by the Mongolian government, of Oyu Tolgoi, after the country's parliament recently approved mining law changes that removed most remaining hurdles for its start-up operations.

Friedland said he was not involved in negotiations going on with the government and could not speak further about the project, one of the world's largest gold deposits, containing at least 46 million ounces.

But the Ivanhoe chief did speak about new discoveries in the area some 50 miles (80 km) from the border with China.

"Recently we found a new deposit, called Heruga, which is a 13 million-ounce gold deposit in its own right, with about 16 billion pounds of copper equivalent," Friedland said.

He said another, as yet unnamed deposit had been located in the area, using Zeus, which was developed by a company called Goviex and is licensed to Vancouver-based Ivanhoe.

"This is non-invasive exploration technology like you would experience if you had a liver problem and needed a CAT scan or if there was something wrong with your brain and you needed an MRI.

"What we're doing is stretching enormous copper wires across he Gobi...and through those wires we put an enormous electrical current," said Friedland.

"This is technology that separates the needles from the haystacks," he said, adding that results of the survey allow mining engineers "to directly see copper and gold." The information is then sent to the drill rigs which can drill straight into the ore body, avoiding the hit-and-miss of traditional mining.

"It would be like burying a 1957 Volkswagen a mile or two deep and discerning whether it is a '57 or '58 model from the shape of the rear bumper," Friedland said.

He said Oyu Tolgoi and other discoveries will be a boon for Mongolia's economy, giving it over 100 years of mining, boosting Gross Domestic Product by 30 percent and increasing employment by 10 percent.

Mongolia's finance minister said on Aug. 25 that the agreement with Ivanhoe would be concluded within two weeks. Ivanhoe and partner Rio Tinto (RIO.AX)(RIO.L) said they expected to sign a deal soon.

Source from Reuters.com 

By The Age, September 9th, 2009 at 6:42 pm - PERMALINK

BHP Billiton's proposed expansion of the Olympic Dam copper/uranium/gold mine in South Australia's outback is set to become the most expensive ever, with analysts estimating an all up cost of $US15-$US20 billion ($17.4-$23.2 billion).

Commentary by William Pesek

Sept. 11 (Bloomberg) -- There’s more than a little irony concerning Mongolia and the date Sept. 15.

That’s when many investors hope an agreement will be reached on the Oyu Tolgoi copper and gold mining project, which could double the size of the economy. It’s also the first anniversary of Lehman Brothers Holdings Inc.’s demise.

The aftershocks are still being felt in this remote and economically disconnected nation of 2.9 million people. All it takes is a stroll through the streets of the capital, Ulan Bator. Idle construction projects, a glut of office space, a surplus of day laborers loitering on street corners -- all the ingredients of an economy in need of a jolt.

There is still a lot of optimism because we are on the cusp of just that. Economists say riches sure to be unleashed by Mongolia’s first major mining project will make it the world’s fastest-growing economy. Yet the global crisis hit the land of Genghis Khan more than many investors expected. Things may get worse before they get better.

Bankers, miners and government officials I chatted with in Mongolia this week are bullish, and for good reason. It’s sitting on quite the lottery ticket if the government can use the nation’s underground riches productively. That’s a very big “if,” though, and for two reasons.

‘Lehman Shock’

One, thanks to the “Lehman shock,” much of the capital available to be deployed in risky, frontier markets just a year ago has dried up. Two, Mongolia still must avoid the so-called oil curse that almost always plagues impoverished nations that suddenly begin exporting vast resources.

It has been a year since my last visit to Mongolia, and the change in the global climate is extreme. Major economies are in recession, including neighboring Russia. While China’s 7.9 percent growth helps, Mongolia’s export boom has yet to begin.

One local banker referred to Mongolia’s “B.L.” and “A.L.” world. The acronyms refer to “Before Lehman” and “After Lehman.” Mongolia’s A.L. existence is certainly more complicated than its B.L. one.

The global slump dented prices of everything from wool to agricultural goods to copper and other metals. Government revenue shrank, while the central bank has drawn down its currency reserves to support the tugrik.

Lucky Nation?

Turmoil aside, bankers such as Peter Morrow, chief executive officer at Khan Bank LLC, say Mongolia is lucky. It may be the only economy with an immediate and obvious fix to its problems. Once major mining projects come online, it will quickly begin reaping big economic gains.

Hence the urgency to get things rolling. Ivanhoe Mines Ltd., the developer of the Oyu Tolgoi project, has tried for more than six years to reach a mining agreement and benefit from demand in China, the biggest metals buyer. At less than $5 billion, Mongolia’s economy could use the business.

None of this offers assurance that Mongolia’s population is ready for this gold-rush dynamic. In March 2008, Ivanhoe estimated the copper resources in the project at 78.9 billion pounds and the gold resources at 45.2 million ounces. Will such spoils overwhelm the economy?

History is littered with examples of how a sudden influx of wealth corrupts governments and impoverishes the masses. Leaders have fewer incentives to diversify economies when the real money is in digging resources out of the ground and exporting them.

Democratic Parliament

There’s reason to think Mongolia, a former satellite state of the Soviet Union, will avoid that scenario. It may be the only Asian country that opted to have a fully elected parliament before having a developed economy.

That may provide a level of transparency and accountability lacking in resource-rich nations such as Indonesia. It would be more comforting if Mongolia had stronger institutions such as independent regulators and courts at the early stages of a resources boom.

Mongolia is at a crossroads and faces a delicate balancing act. It must avoid scaring off investors convinced of its economic potential, while also maximizing its take of the resources. It must then make sure the benefits are distributed wisely and widely among its people.

An oft-heard criticism is that Mongolia has hurt the economy by being slow to allow miners to get to work. Few investors who have waited for years for the Oyu Tolgoi agreement to be completed are holding their breath. It could come next week, next month or take even longer.

More Than Mining

A good argument can be made, though, that Mongolia is right to take its time and get these important decisions right. This is about more than mining; it’s about all the industries that will get a boost from Mongolia’s boom.

Representatives from infrastructure, transport, construction, equipment, banking, telecommunications and retail are keen to tap into Mongolia’s future. All of these so-called supply-chain businesses can create the well-paid jobs the nation lacks. That dynamic is a key reason ever more Mongolians are scrapping their nomadic ways and flocking to Ulan Bator.

It’s more important than ever that the government act prudently in these turbulent times. Few doubt Mongolia’s vast potential. It’s just that in the post-Lehman world, even isolated economies are still assessing the damage.

SHANGHAI, Sept 11 (Reuters) - Metallurgical Corp of China (MCC), which is raising up to $5.3 billion in the world's second-largest initial public offering (IPO) this year, has seen the subscriptions to its Shanghai portion of the IPO freezing up a huge 1.6 trillion yuan ($234 billion), boding well for its listing debut later this month.

MCC, one of China's biggest engineering and construction firms, which is also active on global markets, sold 3.5 billion shares in Shanghai, or 21 percent of its expanded capital, at 5.42 yuan per share, the top end of an indicated price range, it said in a statement on Friday.

MCC has said it needs funds from the Shanghai IPO to develop overseas projects including a copper mine project in Afghanistan. It also needs funds for technical upgrades, equipment purchases, property development and supplemental working capital.

A company document issued on Thursday said MCC would start trading in Shanghai on Sept. 21 and in Hong Kong on Sept. 24.

If it prices its H shares also at the top of an indicated price range of HK$6.16 to HK$6.81, it will raise $5.3 billion combining with the Shanghai portion to be the world's second largest IPO this year, only below China State Construction Engineering Corp's (601668.SS) $7.3 billion IPO in July.

MCC will use the H-share proceeds to fund payment of mining rights in Afghanistan, Argentina and Pakistan, and to fund iron and steel mine projects in Australia, India, Vietnam and Mongolia. Proceeds will also be used to repay bank borrowings and to fund potential acquisitions of overseas mineral resources. (US$1=6.83 Yuan=HK$7.8)