Mongolia says production at Rio´s Oyu Tolgoi mine to start in June

Disagreements between Rio Tinto and the Mongolian government over the Oyu Tolgoi copper and gold mine will not halt a planned June start for commercial production, officials have stressed.

Disagreements between Rio Tinto and the Mongolian government over the Oyu Tolgoi copper and gold mine will not halt a planned June start for commercial production, officials have stressed.

Rio Tinto and Mongolia have been tussling over the future of the world's largest untapped copper deposit as the mine looks set to increase output.

The two failed to agree on a deal last month after disputing over taxes and rising costs which Mongolia believed would cut into prospective earnings for the impoverished country.

They are now operating under a temporary budget and are due to meet again next week.

"The Mongolian government and the investor both highlight the importance that the production should start on time," Dorjsuren Javkhlanbold, a senior official at Mongolia's mines ministry, told Reuters on the sidelines of a conference.

"We have a joint understanding of what we are going to do. We need to make several clarifications (to) our investment agreement and we are confident the revision will soon be successful."

Mongolia signed an agreement in 2009 with Rio Tinto and Oyu Tolgoi owner Ivanhoe Mines, now named Turquoise Hill Resources.

Under the deal, Mongolia received a 34% stake in the project will be able increase its interest to 50% after the first 30 years of operation.

However, politicians have called on the government to amend the deal over concerns about rising costs impacting its share of profits from the mine.

Rio is the largest single investor in Mongolia. It has already delayed a feasibility study on the second phase of the project, which may cost about $7.0bn, according to analyst estimates.

Shares climbed 1.15% to 3,349p at 10:38 Friday.

RD

Recommended

Which assets will benefit as the “jam tomorrow” bubble pops?
Investment strategy

Which assets will benefit as the “jam tomorrow” bubble pops?

With tech stocks, cryptocurrencies and many other “long duration” investments crashing hard, the “jam tomorrow” bubble looks to be bursting. John Step…
24 Jan 2022
Three innovative Asian stocks to buy now
Share tips

Three innovative Asian stocks to buy now

Professional investor Fay Ren of the Cerno Pacific Fund highlights three of her favourite Asian stocks to buy now
24 Jan 2022
Share tips of the week – 21 January
Share tips

Share tips of the week – 21 January

MoneyWeek’s comprehensive guide to the best of this week’s share tips from the rest of the UK's financial pages.
21 Jan 2022
Seven cheap defence stocks to buy now
Share tips

Seven cheap defence stocks to buy now

We’ve got used to a world without war between major powers, but that era is coming to an end as Russia threatens Ukraine and China eyes Taiwan. Buy de…
21 Jan 2022

Most Popular

Shareholder capitalism: why we must return power to listed companies’ ultimate owners
Investment strategy

Shareholder capitalism: why we must return power to listed companies’ ultimate owners

Under our system of shareholder capitalism it's not fund managers, it‘s the individual investors – the company's ultimate owners – who should be telli…
24 Jan 2022
Three innovative Asian stocks to buy now
Share tips

Three innovative Asian stocks to buy now

Professional investor Fay Ren of the Cerno Pacific Fund highlights three of her favourite Asian stocks to buy now
24 Jan 2022
Temple Bar’s Ian Lance and Nick Purves: the essence of value investing
Investment strategy

Temple Bar’s Ian Lance and Nick Purves: the essence of value investing

Ian Lance and Nick Purves of the Temple Bar investment trust explain the essence of “value investing” – buying something for less than its intrinsic v…
14 Jan 2022