Oyu Tolgoi shareholders to meet again

Mar 15 • Business, Government, Mining, News • 3492 Views • No Comments

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Rio Tinto and the Government of Mongolia will sit down for further tough negotiations over the future of the controversial Oyu Tolgoi copper-gold mine on March 20. The Government of Mongolia, which has a 34% shareholding in Oyu Tolgoi and operator Turquoise Hill Resources (TSX:TRQ), which is controlled by Rio Tinto, the owner the remainder of the mine, over development costs, royalties and ownership of the massive  project where commercial production is scheduled for June are expected to discuss over issues like management fees, cost overruns and transparency.

According to a statement by Mongolia’s minister for economic development, Nyamjav Batbayar, there are six main sticking points, centred on cost overruns, the funding and feasibility study for phase 2 of the mine, the employment of Mongolian workers and contractors and corporate governance, for which it now awaits a “concrete response” from Turquoise Hill.

Turquoise Hill has already spent more than $6 billion on the mine in the south Gobi desert, but the mine is now operating under a temporary month-to-month budget from Rio’s coffers.

Rio also suffered a setback last week after the US raised serious concerns over Oyu Tolgoi’s environmental and social impact and decided to abstain from voting on a $4.5 billion debt package being negotiated with the World Bank and other institutions.

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