Thursday, September 18, 2014

Rio Tinto, Turquoise Hill settle Oyu Tolgoi mine tax dispute with Mongolia

  • Rio Tinto (NYSE:RIO) and its Turquoise Hill (NYSE:TRQ) subsidiary move closer to getting the Oyu Tolgoi copper project back on track, after Mongolia's vice minister of mining confirms a tax dispute has been resolved for a $30M payment, far less than the $130M the government originally said was owed.
  • Resolution of the tax issue solves the major dispute between Mongolia and Rio, and provides hope that other disputes over the cost of building the $6B second stage of the Oyu Tolgoi mine can be solved quickly.
  • In maintaining its Outperform rating, Cowen says the resolution removes a major hurdle towards eventual development of Oyu Tolgoi underground; following an official resolution, development should proceed once a feasibility study has been completed, which could be as soon as this year (Briefing.com).

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