* Supreme Court ruled against government in December
* MCC has said will challenge government plans
ULAANBAATAR, Feb 28 (Reuters) - Mongolia’s Constitutional Court ruled on Wednesday that Mongolian Copper Corporation (MCC) never had the right to 49 percent of one of Asia’s biggest copper mines, supporting an earlier resolution by the government to buy back the stake.
The ownership battle is set against the backdrop of miners scouring the globe for new copper terrain as reserves in Chile, the world’s biggest producer, are becoming depleted.
Rio Tinto is among the biggest players in Mongolia, operating a massive underground mine extension at Oyu Tolgoi, but smaller explorers have also been attracted by the nation’s potential as a significant copper producer.
Constitutional Court Judge Dulam Sugar said in a webcast that MCC did not have a claim to ownership because of “violations of Mongolian law”.
His ruling reinforces a government resolution to buy back the stake, which would give it full control of the Erdenet mine, which produces 530,000 tonnes of copper concentrate a year. The decision, however, runs counter to a supreme court ruling in December.
The constitutional court is the highest authority on constitutional matters and stands apart from a separate three-tier system, topped by the supreme court, the highest authority in non-constitutional matters.
MCC purchased the mine from Russia in 2016. The judge on Wednesday said the government then in power had no right to allow the sale without parliamentary discussion and permission.
MCC has said it will challenge the government’s attempts to reclaim the stake.
A spokesman for MCC said in an email to Reuters that it did not consider that the case before the consitutional court affected its “legitimate interest” in the Erdenet mine.
Reporting by Munkhchimeg Davaasharav and Terrence Edwards in Ulaanbaatar and Barbara Lewis in London Editing by David Goodman