Rio Tinto’s Oyu Tolgoi new CEO set to end mine’s disputes
Craig Kinnell, a top copper marketing executive at giant Rio Tinto (ASX, LON: RIO), is the new president and chief executive officer of the miner’s huge Oyu Tolgoi copper and gold mine in Mongolia.
Kinnell, who will take over Cameron McRae on October 1, when the current CEO leaves Rio Tinto, faces ongoing challenges as the government of Mongolia, which owns 34% of Oyu Tolgoi, has been at loggerheads with operator Turquoise Hill Resources (TSX:TRQ) for months. The Canadian company, controlled by Rio, is the owner the remainder of the mine.
The Asian nation twice held up shipments from the mine, due to disagreements over the mine’s expansion, which Turquoise Hill (then Ivanhoe Mines) has been advancing for more than a decade.
Kinnell is not the only new face at Oyu Tolgoi’s board. According to news agency Xinhua, the Mongolian government replaced last week most of the domestic members with younger, English-speaking executives to facilitate negotiations between the parties.
During the board meeting scheduled for this week, Kinnell is likely push for an end of some of the several points of dispute that have caused the Asian country’s foreign direct investment (FDI) to fall 41% and forced Rio to halt the development of the underground portion of the mine, estimated to hold 80% of Oyu Tolgoi’s value.
At full tilt, the mine is set to produce more than 1.2 billion pounds of copper worth over $4 billion at today’s prices, 650,000 ounces of gold ($800 million) and 3 million ounces of silver (under $100 million) each year.
Overall, Oyu Tolgoi is expected to contribute as much as a third of the nation’s economy as it ramps up to full capacity.
Image courtesy of Oyu Tolgoi