Rio set to open mammoth Mongolian mine
Australian mining giant Rio Tinto is preparing to open one of the world's biggest copper mines in southern Mongolia and before it has even started operating the mine has already pushed the country's GDP growth through the roof.
While there are obvious benefits from the mining there are also those who think Mongolia has sold itself short. Some politicians want to force the company into renegotiating the deal.
Oyu Tolgoi is a long way from everywhere in the South Gobi Desert, Australia's Rio Tinto has had to bring in or build everything at this massive copper mine at a cost of around USD 12 billion. Even for a large international enterprise it is a huge investment.
Yet Rio knows that when it opens in the coming months, this operation will become one of the biggest copper mines in the world so big that it alone is going to make up around 30% of Mongolia's entire gross domestic product.
Mr Cameron McRae the company's country director in Mongolia and also the CEO of Oyu Tolgoi said that the mine is expected to be in production for decades. Some of the more optimistic geologists that we have say that this business could run for up to 100 years. Those more conservatively say you know, 50 years plus.
On the back of this investment, Mongolia's GDP has been running at between 12% and 17% growth in recent years and the mine has not even started operating. Not surprisingly there are many supporters hailing the jobs and spin off industries that have come from Oyu Tolgoi. But there are also plenty of critics.
To land this enormous investment in its country, the Mongolian government agreed to give Rio Tinto a large controlling stake in the mine and it has retained only 34%. Most Mongolians go by only one name, including Dorjdari from the Responsible Mining Initiative.
Mr McRae said that "My feeling is Mongolia made a political decision. Dorjdari is campaigning to make the details of mining deals like the Oyo Tolgoi agreement fully public. Whether it's really beneficial for Mongolia, I have many doubts about that.”
He said that “You have on one side of the table Rio Tinto, which has annual revenue far larger than our whole economy and you have best paid lawyers in the world who do those sorts of deals every year on a regular basis. On the other side of the table you have Mongolian government people and none of them did such negotiations in the past."
Source - ABC.net
(www.steelguru.com)
While there are obvious benefits from the mining there are also those who think Mongolia has sold itself short. Some politicians want to force the company into renegotiating the deal.
Oyu Tolgoi is a long way from everywhere in the South Gobi Desert, Australia's Rio Tinto has had to bring in or build everything at this massive copper mine at a cost of around USD 12 billion. Even for a large international enterprise it is a huge investment.
Yet Rio knows that when it opens in the coming months, this operation will become one of the biggest copper mines in the world so big that it alone is going to make up around 30% of Mongolia's entire gross domestic product.
Mr Cameron McRae the company's country director in Mongolia and also the CEO of Oyu Tolgoi said that the mine is expected to be in production for decades. Some of the more optimistic geologists that we have say that this business could run for up to 100 years. Those more conservatively say you know, 50 years plus.
On the back of this investment, Mongolia's GDP has been running at between 12% and 17% growth in recent years and the mine has not even started operating. Not surprisingly there are many supporters hailing the jobs and spin off industries that have come from Oyu Tolgoi. But there are also plenty of critics.
To land this enormous investment in its country, the Mongolian government agreed to give Rio Tinto a large controlling stake in the mine and it has retained only 34%. Most Mongolians go by only one name, including Dorjdari from the Responsible Mining Initiative.
Mr McRae said that "My feeling is Mongolia made a political decision. Dorjdari is campaigning to make the details of mining deals like the Oyo Tolgoi agreement fully public. Whether it's really beneficial for Mongolia, I have many doubts about that.”
He said that “You have on one side of the table Rio Tinto, which has annual revenue far larger than our whole economy and you have best paid lawyers in the world who do those sorts of deals every year on a regular basis. On the other side of the table you have Mongolian government people and none of them did such negotiations in the past."
Source - ABC.net
(www.steelguru.com)
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