Rio Tinto faces more hurdles at Oyu Tolgoi - Mongolia shareholder
Reuters reported that Rio Tinto faces lingering disputes with the Mongolian government over its Oyu Tolgoi copper mine.
Mr Tserenbat Sedvanchig executive director of Erdenes Oyu Tolgoi that “The government still has 22 points of dispute with Rio Tinto, operator of the project which is expected to boost the country's economy by 35% by 2020. Grievances include 4 issues related to violations of Mongolia legislation and the investment agreement. Capital expenditure was the biggest issue.”
Mr Sedvanchig said that "If we don't make clear what was the amount of initial investment, resolution of some of the other 21 issues will be hindered.”
Rio Tinto, whose Turquoise Hill Resources subsidiary owns 66% of Oyu Tolgoi. Oyu Tolgoi, one of the world's five biggest copper mines began exporting copper to China on July 9 after 2 delays in June. It won the all clear to export after Rio Tinto agreed to notify Mongolian authorities of all foreign and local bank accounts that it would be using to deposit Oyu Tolgoi revenue.
Mr Sedvanchig said that "Any action aimed to tax evasion will be strictly prosecuted under our law and Rio Tinto and the company management team probably understand this well. We requested Oyu Tolgoi to register all its domestic and foreign accounts with relevant state agencies."
He said that exports were pushed forward despite the unresolved disputes because the project needed the cashflow and stockpiles were getting full. All parties agreed that exports should commence immediately to let Oyu Tolgoi have a source of income. Mongolia will receive at least USD 100 million in royalties from Oyu Tolgoi this year.
The Mongolian government has said that the USD 6.5 billion project is at least USD 2 billion over budget. Other issues that remain to be resolved include the government's demand for equal pay for Mongolian and foreign workers, concern about high management fees and fair representation of Mongolians in management.
Mr Sedvanchig said that "The Oyu Tolgoi appointed working group worked for three months. Some initial conclusions are already emerging. Soon they will be finalized. After that, the parties will discuss them."
He said that the government and Rio Tinto will need to resolve the dispute over the costs of the first phase of the project before agreeing on funding for the second phase an underground development expected to cost more than USD 5 billion.
Source - Reuters
(www.steelguru.com)
Mr Tserenbat Sedvanchig executive director of Erdenes Oyu Tolgoi that “The government still has 22 points of dispute with Rio Tinto, operator of the project which is expected to boost the country's economy by 35% by 2020. Grievances include 4 issues related to violations of Mongolia legislation and the investment agreement. Capital expenditure was the biggest issue.”
Mr Sedvanchig said that "If we don't make clear what was the amount of initial investment, resolution of some of the other 21 issues will be hindered.”
Rio Tinto, whose Turquoise Hill Resources subsidiary owns 66% of Oyu Tolgoi. Oyu Tolgoi, one of the world's five biggest copper mines began exporting copper to China on July 9 after 2 delays in June. It won the all clear to export after Rio Tinto agreed to notify Mongolian authorities of all foreign and local bank accounts that it would be using to deposit Oyu Tolgoi revenue.
Mr Sedvanchig said that "Any action aimed to tax evasion will be strictly prosecuted under our law and Rio Tinto and the company management team probably understand this well. We requested Oyu Tolgoi to register all its domestic and foreign accounts with relevant state agencies."
He said that exports were pushed forward despite the unresolved disputes because the project needed the cashflow and stockpiles were getting full. All parties agreed that exports should commence immediately to let Oyu Tolgoi have a source of income. Mongolia will receive at least USD 100 million in royalties from Oyu Tolgoi this year.
The Mongolian government has said that the USD 6.5 billion project is at least USD 2 billion over budget. Other issues that remain to be resolved include the government's demand for equal pay for Mongolian and foreign workers, concern about high management fees and fair representation of Mongolians in management.
Mr Sedvanchig said that "The Oyu Tolgoi appointed working group worked for three months. Some initial conclusions are already emerging. Soon they will be finalized. After that, the parties will discuss them."
He said that the government and Rio Tinto will need to resolve the dispute over the costs of the first phase of the project before agreeing on funding for the second phase an underground development expected to cost more than USD 5 billion.
Source - Reuters
(www.steelguru.com)
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