Rio Tinto open to talks on sweeter Oyu Tolgoi deal for Mongolia
Rio Tinto is prepared to negotiate with Mongolia about improving the expansion terms for its $16.8bn Oyu Tolgoi mine.
Rio Tinto is prepared to negotiate with the Mongolian government about improving the expansion terms for its $16.8bn Oyu Tolgoi mine as the Asian nation presses for a better deal.
A Mongolian parliamentary review of agreements struck in 2009 and 2015 with Rio, which handed 34 per cent of the mine to the nation, said on Thursday the government should boost the investment pacts underpinning the copper-gold mine to ensure it received a better financial return.
Rio chief executive Jean-Sebastien Jacques said the company was ready to talk to the government.
“We will have an ongoing dialogue with the government in order to see if there are better ways to create more value and more wealth for all shareholders, including the government,” Mr Jacques said in Sydney on Monday.
“If the question is to say ‘are you ready to engage with the government and other stakeholders to see how can we create more wealth and share the wealth across all shareholders’ — absolutely.”
However, Mr Jacques also noted the “sanctity” of the original deals struck back in 2009.
“We had an agreement put in place in 2008-09 and the sanctity of the agreement is absolutely essential for us because it’s big and billions and billions of dollars,” Mr Jacques said.
“The starting point of our investment even before Rio came in is the sanctity of the series of agreements and the sanctity of the agreement is absolutely essential for us to continue to invest. That’s where we are.”
Rio is working on a $US5.3bn ($7.8bn) underground development that will more than triple Oyu Tolgoi’s production, from about 160,000 tonnes of copper last year, turning the mine into a major centrepiece of Rio’s non-iron ore assets.
The mine is 66 per cent-owned by Rio’s Canadian subsidiary Turquoise Hill.