Oyu Tolgoi, reportedly one of the biggest copper lodes waiting to be mined, is up for sale. Vancouver-based Ivanhoe Mines, the majority owner of the Mongolian deposit that has been decades in the “permitting” process, has put itself up for sale. Rio Tinto which owns nearly twenty percent of the deposit is the obvious purchaser. But speculation is rife that BHP and Anglo American are also interested. As are the Chinese from whom Mongolia is a mere neighbour. A long and detailed report notes:

Bankers and fund managers suggested that a joint venture between Rio and a Chinese bidder like Chinalco is a good possibility. Rio is looking to mend ties with the Chinese state-owned company after Rio spurned Chinalco on a $19 billion deal last year. "Whilst the Chinese would like to get involved with it, because it’s right on their doorstep, the impression has been in the past that the Mongolian government may not be interested in the Chinese coming in," BT Investment’s Barker said.

The temptation to buy Ivanhoe is obvious: get your hands on a large, rich deposit essentially approved by the country’s government. The problems with purchase are also obvious: the need for huge sums of money to buy and develop the project, and the volatile political climate of Mongolia which could renege on permission at any time. Then there is the fact that a significant part of the holding company is owned by the Mongolian government itself and that will not make agreement easy to get on any substantive issues.

The need for money is behind Ivanhoe’s thinking on selling itself. One report notes that Ivanhoe needs to raise four billion dollars to pay for its share of project development. That is a lot of money to be raised by a small Vancouver company that has a track record of failure in the United States. To this end Ivanhoe has retained one of those masters of the universe New York finance companies/banks Citi to advise them. Luckily for the investor, Ivanhoe has also retained Hatch Corporate Finance as an advisor. Although as a coffee-pot expert notes, four billion is not a lot in reality, and there are many suitors from Xstrata to GoldCorp and all the rest—at least ten big international mining companies—that need to increase their reserves.

In practice, this story will play out over the next year and will provide much fodder for the news, views, and reviews bloggers on mining matters. As a small time investor, you can play by buying shares in those whom you suspect will be the winners and selling shares in the anticipated losers. One way or the other there will be many shares traded and large sums of money will change hands. Of course Citi and Hatch will do well regardless. The rest of us will devour the news and form views and move shares around in a frantic play to profit. To give you a brief idea of the sums involved, I quote from a full report:

"Ivanhoe, along with Rio Tinto, last month committed to a conditional 2010 budget of $US758million for OyuTolgoi. About half of this comes from Rio after the mining giant spent about $US387m to double its stake in Ivanhoe to 19.7 per cent in October last year. Ivanhoe Australia shares fell 3 cents to $3.70 in early trade."

As a social scientist, you can watch this story unfold and interpret it in accordance withyour prevailing prejudices. One approach is to celebrate the triumph of Canadian mining in once again bringing to fruition another deposit in a forbidding place. Or you can sit in amazement at the skills or Robert Friedlundin once again pulling off the seemingly impossible–recall Summitville and Voisey’sBay. Or you can go and see Avatar and grieve at another instance of the great white man coming into a pristine wilderness to gobble up the resources of a primitive people soon to bethrust from Edento modern hell. Or you can shudder at the idea that China will buy the mine and squirm their way into Mongolia ultimately to protect their financial interests by controlling the government–imaginethe stories ten years hence of Mongolian exiles retracing the steps ofthe Dalai Lama.

Regardless of how you invest or how your view the morality play now unfolding in the high hills of Mongolia and the mining capitals of the globe, we must all agree that here is a story worthy of watch and a story that will incorporateall the issues and aspects of modern mining in primitive countries.Here is a story that will pitthegiants with David, and that will raise nationalistic fears and prejudices that will buffet consciences, and make buffoonsof commentators. Stand by.