Rio Tinto scores big win in Mongolia

The world鈥檚 second largest miner Rio Tinto (ASX, LON, NYSE: RIO) has in Mongolia after the country鈥檚 parliament unanimously approved a resolution that reconfirms the validity of all the Oyu Tolgoi mine-related agreements approved since 2009.
The legislators鈥 brings an 18-month review on the deals governing the copper-gold mine to a close, allowing the company to continue with an ongoing $7 billion expansion of the operation.
The news is something of a relief for Rio Tinto, which feared the government might try to completely renegotiate the agreements on the asset鈥檚 development 鈥 a 2009 investment agreement, a 2011 amended and restated shareholder agreement and a 2015 underground mine development and financing plan.
Parliament’s resolution brings to a close an 18-month review on the deals governing Oyu Tolgoi copper-gold mine
The resolution, however, recommends to explore options to improve the deal, including looking at the Mongolian government’s equity share in Oyu Tolgoi, a re-definition of the reserve report and updated feasibility report, and a renewal of environmental and water assessments.
鈥淎dherence to these agreements by all parties has underpinned a total in-country spend of around $10 billion since 2010,鈥 Rio Tinto鈥檚 chief executive copper and diamonds, Arnaud Soirat, said .
Soirat acknowledged there was still 鈥渁 lot of work to do鈥 to ensure Oyu Tolgoi reaches its full potential.
Oyu Tolgoi was discovered in 2001 and Rio gained control of it in 2012. The ongoing mine expansion is expected to lift production from 125鈥150kt this year to 560kt at full tilt from 2025, making it the biggest new copper mine to come on stream in several years.
The giant operation is one-third owned by Mongolia鈥檚 government and two-third held by Canada鈥檚 Turquoise Hill Resources (TSX, NYSE:TRQ). Out of Turquoise鈥檚 66% share, Rio owns 51%.
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