Rumor Mill at Full Production Levels

The international press and local rumor mill are at full production levels regarding the Oyu Tolgoi stability agreement between Ivanhoe Mines, Rio Tinto, and the Mongolian government. Conclusion of the agreement is apparently imminent according to some sources. See the following article for an example:

Talk is that Ivanhoe may win approval in Mongolia

The skeptical among us have pointed out that this sort of statement of imminent signing has been in the press numerous times before with the depressing result of more of the same. A scholar at the center pointed out that at about the same time the rumors began circulating, Rio Tinto made some financial transactions which strengthened confidence in both Ivanhoe's and Rio's ability to finance a deal if it is signed. This drove share prices up for Ivanhoe before the imminent signing rumors began leaking into the press, possibly creating a confounding element in people's appraisal of the situation. See the following article for an example:

Ivanhoe Soars After Rio Sells Shares to Repay Debt

The final twist is that most of this news has not made its way into the local media. This is indeed very interesting, because it raises some interesting possibilities. Is it because the rumors are false? No need to report on something that is patently untrue and counterproductive? If this is the case, then the local media has suddenly turned a new leaf. It would be so unlike them to show such a disciplined level of journalistic integrity. (Yes, I am a cynic with regards to the local media).

Another possibility is that a deal is nearing but it is extremely fragile. So fragile, in fact, that everyone involved would like to keep it quiet from local agitators until it is either pushed through or gains enough strength to stand against a potential tide of opposition. But at the same time, in order to strengthen bargaining positions, one or both sides are leaking information to international interests to create momentum behind the deal. I am inclined to believe this possibility is in play at the moment. A deal is ready to go, but it is not robust enough yet to get a full public airing. Are members of parliament living by the old adage that it is better to ask for forgiveness than for permission? It may be so, and it may be the best strategy given the incendiary nature of the issue for some vocal oppositional factions. With some poll estimates showing that over 80% of the public would like to see an agreement signed, though, it may not be all that bad of a political strategy in the long run.

In the end, time will tell if it is for real or just more of the same.