ELEANOR HALL: A Mongolian embassy official says the Australian lawyer being held by the Mongolian government is a witness in a case alleging unpaid tax by a mining company.
Thirty-two-year-old Sarah Armstrong tried to leave Mongolia on Friday, but was stopped at the airport by officials.
She's the chief legal counsel to a subsidiary of the mining giant Rio Tinto, South Gobi Resources.
Sarah Dingle has the latest.
SARAH DINGLE: Australian lawyer Sarah Armstrong has been working in Mongolia for a year.
Her employer, South Gobi Resources, is a subsidiary of Rio Tinto, and is one of the largest coal producers in Mongolia.
South Gobi Resources in turn has a wholly-owned subsidiary, South Gobi Sands.
Last Friday, Sarah Armstrong went to catch a flight at the country's only international airport but found herself unable to leave.
Hantulga Galaazagraa is the attache of the Mongolian embassy in Canberra.
HANTULGA GALAAZAGRAA: Sarah Armstrong was asked not to leave the Mongolia because of the tax issue. Mongolian anti-corruption authority is investigating the case against the South Gobi Sands which operates in Mongolia and Ms Sarah Armstrong was asked not to leave the country because she might be the witness to the case and she might be, she was thought to be the closest witness to this tax issue case.
SARAH DINGLE: Do you have any idea what the nature of the tax dispute is?
HANTULGA GALAAZAGRAA: Well the tax issue has been going on several months. The investigation has been going on for several months. It's a huge number of tax issue. And they haven't been paying the tax to Mongolian tax authority.
SARAH DINGLE: Do you mean a large number of, a large amount of unpaid tax?
HANTULGA GALAAZAGRAA: Yes, that's it.
SARAH DINGLE: It's been reported that about four months ago Sarah Armstrong signed a document regarding corruption in Mongolia, regarding Mongolian officials. Does that have any bearing on this case?
HANTULGA GALAAZAGRAA: At the moment we don't have any information, detailed information regarding that case. So I have no idea.
SARAH DINGLE: South Gobi Resources' vice president for external affairs, Dave Bartel, disputes claims that the company has unpaid taxes.
DAVE BARTEL: We've received no indication from any government agency that there is any issue with tax statements and to our knowledge we're current on all our taxes.
SARAH DINGLE: Mr Bartel says Sarah Armstrong was the signatory to a formal document lodged with the government in July.
DAVE BARTEL: There was a notice of investment dispute that the company filed against the Mongolian government in July and Sarah was the person who signed that document.
It was primarily regarding some pre-mining agreements on licences that had not been granted. We'd applied for those back in late 2011 and they had not been granted and we felt that the path that we needed to take was to file the notice of investment dispute.
SARAH DINGLE: Dave Bartel was unable to clarify what assistance South Gobi Resources is providing to Ms Armstrong.
Dave Bartel says the investigation with Sarah Armstrong is not having an impact on South Gobi Resources' operations.*(see editor's note)
Attache to the Mongolian embassy in Canberra, Hantulga Galaazagraa, says Sarah Armstrong's case could cost Australian mining interests in Mongolia.
HANTULGA GALAAZAGRAA: It might cause some problems. Last year we have around 140 medium sized company who were interested in investing in Mongolia. So it might cost, in this case it might cost the interest of Australian mining companies to Mongolia.
SARAH DINGLE: Mr Hantulga says he expects that Sarah Armstrong will be allowed to leave the country within days.
ELEANOR HALL: Sarah Dingle reporting.
*EDITOR’s NOTE (13 November 2012): The original broadcast item incorrectly named the Oyu Tolgoi mine as being operated by South Gobi Resources, it is in fact operated by a separate Rio Tinto subsidiary, Turquoise Hill Resources. The transcript has been amended.
The full story...
Claims Australian lawyer wanted to clarify unpaid Mongolian taxes
Sarah Dingle reported this story on Wednesday, October 24, 2012 12:25:00
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