Canadian involved in uranium dispute found dead in Mongolia
A Canadian businessman involved in a $100 million-plus dispute over a uranium deposit in Mongolia has been found dead in his hotel room in that country, according to press reports from Toronto.
No details have yet emerged as to the cause of death. But Toronto’s Globe & Mail reports that Jim Doak, 59, had been in the country in his role as chairman of Khan Resources Inc., a small uranium company that has been engaged in a long legal battle with the government in Ulan Bator. A friend of Mr Doak’s told InvestorIntel that the businessman was a very fit, lean and healthy person.
Mr Doak had formerly been a research analyst on Bay Street, the centre of Toronto’s financial district, and has been described as being prepared to ask awkward questions of business leaders, especially when he believed companies had failed to protect shareholders. He was also a regular on the Business News Network. As well as being involved with Khan, he also worked with his new fund company.
The disputed property had previously been owned and mine by a Russian company and Moscow is making efforts to have a larger say in Mongolia’s uranium industry.
Mr Doak’s death comes as there is an increasing focus on Russia’s global uranium ambitions. According to the World Nuclear Association (WNA), since 2008 Russia has re-established its position in developing northeastern Mongolian uranium deposits. By coincidence, Russia’s uranium interests were also in the news over the week with The New York Times revelations that donations from Uranium One, which was to end up in Russian hands, flowed to the Clinton Foundation. Bloomberg reports that, since 2013, Rosatom, the nuclear energy arm of the Russian state, has controlled 20% of America’s uranium output through the acquisition of the Toronto-based miner Uranium One Inc and its Wyoming mine.
The dispute between Khan and Mongolia involved the Dornod deposit. Khan had been involved in the development of the property since 1995. According to the company’s website, Khan completed a full definitive feasibility study in 2009, which demonstrated highly positive economics for the project. That study showed that Khan could produce 1150 tonnes of uranium a year over 15 a mine life of 15 years
“However, in January 2009, Mongolia and Russia had announced their intention to form a new Mongolian-Russian joint venture to replace Khan in mining the Dornod property. In July 2009, the Government of Mongolia promulgated its Nuclear Energy law, which among other items, provided the State with 51% of the Dornod property without compensation to prior owners,” the website continued.
An international arbitration panel ruled that Mongolia compensate Khan and the company had stated the compensation, plus interest, of $103.8 million should be paid forthwith. Khan had claimed $200 million damages plus $126 million in interests and costs.
The Mongolians claimed they had suspended Khan’s licences due to alleged violations of Mongolian law.
The WNA explains that Mongolia’s co-operation with Russia goes back to the 1950s, when the Asian country was essentially a satellite of the Soviet Union. The first successes included Dornod, which is located in the northeast of Mongolia, and that deposit was mined from 1988 until 1995 with the ore railed to Krasnokamensk in Siberia for processing. According to Atomredmetzoloto (ARMZ), the Soviets and Russia spent $600 million (in 2009 dollars) on uranium in Mongolia up until 1995.
The WNA reports that Russia is examining the feasibility of building nuclear power plants in Mongolia, with Dornod province being one of the proposed sites.
InvestorIntel.com is a leading online source of investor information that provides public market coverage for both investors and industry alike. A qualified online influencer through ... <Read more about InvestorIntel>