I may have been unclear Art, but I'm not accepting the only two outcomes possible are amend the IA or go to arbitration. Far from it, I think RioT would be very imprudent to ever agree the IA can be amended. Otherwise they would face demands to renegotiate for ever, depending on how the wind blows.
My best guess is ongoing diplomacy will find some quiet resolution.
Looks more to me as if some Mongolians want a little more personal security and the real issue is about how they deal among themselves. In the meantime a few rogues are threatening a foreign partner. This goes right back to good-old charging down off the steppes and grabbing a few hostages from the gers down the road. Oh, some fight over grazing rights, or old scores to settle, these people like to try and take matters into their own hands because they don't trust the mechanics of modern democracies, like an independent judiciary or a civil service not operating for personal gain. They don't see the upside of cooperation and gain for everybody because they have lived through a long period where it was each for himself, and there was no collective wealth. By threatening TRQ they perhaps expect to further payment of some kind of personal tribute - notwithstanding the recent efforts to demonstrate such behavior is no longer the status quo. On the other hand, it looks from some reports that even going to jail for a few years isn't bad wages in the least when there are millions if not billions to be had. Call me a cynic - it isn't a negotiation about ethics, it is just about nailing down a satisfactory price for anybody who can block the deal, and the accomodations and compromises to be made need not have anything at all to do with the IA. The ongoing blather about water and the plumping of naive international writers to republish the same incorrect information and fear-mongering is much the same.
Sales of copper concentrate to China and the cashflow that represents trump everything.