Mongolian president's return could prolong Rio Tinto's Oyu Tolgoi pain
RIO Tinto's problems with the stalled $US10 billion Oyu Tolgoi copper-and-gold mine in Mongolia might not be helped by the country's elections tomorrow.
Global analytics consultancy IHS says the incumbent president, Tsakhiagiin Elbegdorj of the Democratic Party, is expected to win the elections, prolonging Mongolia's push to take more of the project than was agreed in an investment regime with Rio.
Rio has already warned it might not go ahead with a second, more profitable stage of the big mine if certainty cannot be obtained.
"While Elbegdorj supports legal reforms and is publicly committed to foreign investment, he supports increasing the level of state and local government control of the mining sector," IHS analyst Neil Ashdown said.
Oyu Tolgoi was supposed to start exporting on June 14 but has been delayed by the government twice.
"It is possible the delay relates to the ongoing negotiations between the government of Mongolia and Rio Tinto," Mr Ashdown said.
"If this is indeed the issue, then it is unlikely to be resolved until after the elections."
Global analytics consultancy IHS says the incumbent president, Tsakhiagiin Elbegdorj of the Democratic Party, is expected to win the elections, prolonging Mongolia's push to take more of the project than was agreed in an investment regime with Rio.
Rio has already warned it might not go ahead with a second, more profitable stage of the big mine if certainty cannot be obtained.
"While Elbegdorj supports legal reforms and is publicly committed to foreign investment, he supports increasing the level of state and local government control of the mining sector," IHS analyst Neil Ashdown said.
Oyu Tolgoi was supposed to start exporting on June 14 but has been delayed by the government twice.
"It is possible the delay relates to the ongoing negotiations between the government of Mongolia and Rio Tinto," Mr Ashdown said.
"If this is indeed the issue, then it is unlikely to be resolved until after the elections."
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