Rio Tinto Delays 1st Oyu Tolgoi Copper Shipment At Mongolia's Request
LONDON -- Rio Tinto PLC (RIO) said Thursday the Mongolian government has requested the delay of first copper concentrate shipment from the massive Oyu Tolgoi gold and copper project, which was due to start shipping on Friday.
"Oyu Tolgoi is ready to start its first shipments of copper concentrate from its Mongolian mine and all necessary permits to do so have been received from relevant authorities," a Rio Tinto representative said in an emailed statement. "However, plans to start shipping on Friday 21 June have been postponed at the request of the Government of Mongolia," he added.
The representative said Rio Tinto is keen to start shipping as soon as possible in order for the benefits of the mine to start flowing to all stakeholders, including the Mongolian population.
"Shipping will commence as soon as the Government indicates its support for us to do so," he added.
The Mongolian government is currently gearing up for its presidential election on Wednesday. It is also in discussions with Rio Tinto about the 2009 Oyu Tolgoi investment agreement with a view to making sure that the government is able to reap an adequate and timely return from the project in light of the project's escalating costs. Both sides have previously described the discussions as constructive.
The $6.2 billion Oyu Tolgoi mine is key for Rio Tinto reducing its dependence on iron ore, which accounts for about 80% of its earnings. Faced with volatile commodities markets, new Chief Executive Sam Walsh is moving to simplify the company's structure and is selling non-core and poor performing assets and targeting more than $5 billion in cost savings by the end of next year. A number of senior managers at Rio Tinto's iron ore division in Western Australia were laid off this week.
The first copper-gold concentrate was produced at Oyu Tolgoi in January and Rio Tinto had forecast commercial output would begin by the end of June, provided it could settle a dispute with Mongolia's government over costs and the further development of the mine.
Rio Tinto operates and controls Oyu Tolgoi through its majority stake in Turquoise Hill Resources Ltd. (TRQ.T), which owns 66% of Oyu Tolgoi and the Mongolian government the remaining 34%.
-Write to Alex MacDonald at alex.macdonald@wsj.com
"Oyu Tolgoi is ready to start its first shipments of copper concentrate from its Mongolian mine and all necessary permits to do so have been received from relevant authorities," a Rio Tinto representative said in an emailed statement. "However, plans to start shipping on Friday 21 June have been postponed at the request of the Government of Mongolia," he added.
The representative said Rio Tinto is keen to start shipping as soon as possible in order for the benefits of the mine to start flowing to all stakeholders, including the Mongolian population.
"Shipping will commence as soon as the Government indicates its support for us to do so," he added.
The Mongolian government is currently gearing up for its presidential election on Wednesday. It is also in discussions with Rio Tinto about the 2009 Oyu Tolgoi investment agreement with a view to making sure that the government is able to reap an adequate and timely return from the project in light of the project's escalating costs. Both sides have previously described the discussions as constructive.
The $6.2 billion Oyu Tolgoi mine is key for Rio Tinto reducing its dependence on iron ore, which accounts for about 80% of its earnings. Faced with volatile commodities markets, new Chief Executive Sam Walsh is moving to simplify the company's structure and is selling non-core and poor performing assets and targeting more than $5 billion in cost savings by the end of next year. A number of senior managers at Rio Tinto's iron ore division in Western Australia were laid off this week.
The first copper-gold concentrate was produced at Oyu Tolgoi in January and Rio Tinto had forecast commercial output would begin by the end of June, provided it could settle a dispute with Mongolia's government over costs and the further development of the mine.
Rio Tinto operates and controls Oyu Tolgoi through its majority stake in Turquoise Hill Resources Ltd. (TRQ.T), which owns 66% of Oyu Tolgoi and the Mongolian government the remaining 34%.
-Write to Alex MacDonald at alex.macdonald@wsj.com
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