Rio Tinto delays Oyu Tolgoi expansion


Rio Tinto (RIO) puts on hold all work on the underground expansion of the Oyu Tolgoi copper mine in Mongolia after the government says parliament will need to approve an anticipated $5B in financing for the project.

Mongolia's government has grown increasingly concerned about the cost of the project and the potential for a delay in when it starts receiving its share of profit from the mine.

Oyu Tolgoi is 66% owned by Rio's Turquoise Hill (TRQ) unit and 34% by the government.

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Comments (8)
  • mccorj
    , contributor
    Comments (15) | Send Message
     
    this is getting to be a tiresome joke. Shut the whole thing down completely until the grown ups show up. The jv just doesn't cut it.
    Pretty soon a bird will build a nest there then they'll shut the whole thing down forever. This will favor those who want to stop all foreign investment. The world can go on without them.
    This is not interesting anymore. They want to do it themselves, let them.
    29 Jul 2013, 08:34 AM Reply Like
  • Oyu
    , contributor
    Comments (9) | Send Message
     
    Here we go again...
    29 Jul 2013, 09:01 AM Reply Like
  • marpy
    , contributor
    Comments (1705) | Send Message
     
    This should not be real news to anyone that has been following this story. The problem with this project has always been the government of Mongolia due to unstable policy, their anti foreigner and foreign corporation stand, a gullible public that buys into the government rhetoric, and the high degree of corruption in Mongolia and in the GOM.
    Mongolia is acting more like a banana republic than the democracy it is pretending to be. While most governments collect royalties, taxes and other fee's while letting companies own and operate mines, Mongolia has decided that it wants ownership in OT (something to do with nationalist pride and charting their own destiny but in reality all they have done is show the rest of the world what a joke they are). Their actions have greatly damaged the Mongolian economy as foreign investment has shrunk dramatically with many projects being put on hold or cancelled completely.
    As the government of Mongolia has proven over and over again that it can not be trusted, Rio Tinto has taken the correct action here as it makes no sense to invest billions of dollars while Mongolia continues to show that it can not honor past agreements and keeps wanting to change the rules.
    With respect to the Oyu Tolgoi investment agreement, Mongolia hired some of the best mining and finance consultants, spent over 2 years negotiating this agreement which leaves over 70% of proceeds in Mongolia and yet they are still not happy. Rio Tinto and TRQ have invested over 6 billion dollars on the basis of this agreement and have a very solid contract enforceable in world courts.
    this is not the first time that the GOM has tried to shake down a foreign corporation and it will not be the last (see Khan resources and South Gobi coal for other examples - both well covered in SA). The difference here though is that Rio Tinto is a very large well experienced miner that can handle the situation better than the smaller companies the GOM usually picks on.
    29 Jul 2013, 09:45 AM Reply Like
  • BPolus
    , contributor
    Comments (42) | Send Message
     
    Appears GOM wants a future profit sharing/expense projection by Rio/TRQ. GOM should be reminded that Rio/TRQ has invested quite a bit of $$$ and time bringing this mining project to surface. However, profits can not be supported if mining venture is curtailed every time a step forward ends up two steps backwards at the whim of GOM planning demands. Issues are delaying forward profits for everyone.concerned. Someone has to get off the pot and make some serious decisions before joint venture goes to pot for everyone that has high hopes for GOM,Rio, & TRQ!!!
    29 Jul 2013, 10:35 AM Reply Like
  • SSRT84
    , contributor
    Comments (2) | Send Message
     
    The masses in Mongolia need to wake-up and get rid of these greedy donks. This delay will affect the lives of all Mongolians just because of the actions of some inept politicians. The people of Mongolia need to contact the Arabs and let them show them what the Arab Spring and do to toss out corrupt politicians
    29 Jul 2013, 11:05 AM Reply Like
  • wgrogers
    , contributor
    Comments (107) | Send Message
     
    "Mongolia's government has grown increasingly concerned about the cost of the project and the potential for a delay...."

     

    This is rich -- the GOM instigates delay after delay and then is concerned about the cost and delays?

     

    I think the "banana republic" reference above is overly generous.
    29 Jul 2013, 12:57 PM Reply Like
  • mccorj
    , contributor
    Comments (15) | Send Message
     
    OK. We'll take Park Place and Boardwalk.
    Let them put up the 6 Billion.
    We'll be the guys that go to Jail but we can play sick.
    Give them Marvin Gardens and Ventnor Avenue.
    Since its our country, we get the Electric Company so we can double the rates. We also need the railroads. But make them so they don't fit the neighboring country that our goods will be sold to or pass thru. This way we can call it protection and increase costs considerably. Don't let them have the Water company either.

     

    There they ought to like that. Then we'll start to play once they put up the first 6Billion. Make it harder for them to put up the next 6Billion--toss in a few more delays. Let them play just enough so we can get some income from the concentrate. They'll think its to help them and maybe other countries will follow them with investments.

     

    Holy cow. They don't like the new rules.

     

    Screw them, we'll win eventually. We're used to the hard life, its our heritage. Look how long we've lasted like this. Who needs heat, hot water, medical benefits, better education etc etc etc. That's for greedy foreigners.

     

    Not us. We're smarter. They'll do it our way, or else.

     

    yawn

     

    30 Jul 2013, 08:58 AM Reply Like
  • SSRT84
    , contributor
    Comments (2) | Send Message
     
    What a bunch of greedy donks. They do not realize that their people will suffer if construction of the underground mine is halted indefinitely. The people of Mongolia need to wake-up and follow the examples of the Middle East where the Arab Spring has gotten rid of corrupted leaders.
    30 Jul 2013, 10:16 AM Reply Like
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