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Rio Tinto still committed to Oyu Tolgoi – CEO

Oyu Tolgoi mine. Image courtesy of Turquoise Hill Resources

Rio Tinto remains committed to the Oyu Tolgoi copper mine in Mongolia, CEO Jakob Stausholm said on Wednesday during the group’s year-end results call.

Stausholm said that Oyu Tolgoi was an “impressive mine” that would yield a “big win-win” for both the country and the miner.

Mongolia’s government is said to be actively seeking to cancel the deal with Rio Tinto governing a $6.75 billion expansion of the copper mine, as it looks to replace it with a new agreement for beneficial to the country.

“What it is about right now, is to have the right conversation and find the right solutions,” Stausholm said.

Ulaanbaatar threatened in early January to halt construction at the mine, arguing that delays and higher-than-expected costs had eroded the economic benefits the country had hoped for.

Rio had in 2019 flagged stability risks associated with the original project design, which translated into as much as an additional $1.9 billion cost and a 30-month delay.

The miner confirmed in December the new estimate for the long-awaited underground expansion, adding that production would begin in October 2022.

In January, the miner appointed Mongolian national Bold Baatar as Rio Tinto CEO of copper operations, in a move seen to improve the relationship with the government.

“Bold Baatar has already set his team and they have commenced discussions with the government of Mongolia,” Stausholm said.

“If we both have an incentive to find solutions, and we have the right relationship, I remain convinced we will get to solutions.”

The mining giant has repeatedly said the Oyu Tolgoi underground expansion is its most important growth project. Once completed, Oyu Tolgoi will churn out 480,000 tonnes of copper a year from 2028 to 2036.