Repealing the 68% tax law was considered essential to enable foreign mining companies to invest in mineral resources development of Mongolia.
[3] The implementation of the tax was not anticipated by Vancouver-based Ivanhoe Mines, owners of the Oyu Tolgoi Project in Mongolia.
Following the announcement by the government shares of Ivanhoe (traded on the Toronto Stock Exchange) dropped over 21% (or CA$2.22)).
Others suggested that the small scale independent miners would simply not report their full production to the government, or turn to smuggling to avoid the tax.
The government agreed to the removal of the tax in return for an increase in royalties from Oyu Tolgoi.