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Ten banks to back up Rio Tinto’s Oyu Tolgoi: report

Construction camp looks quiet, for now

At least ten banks have committed close to $300 million each to back up Rio Tinto’s (LON, ASX:RIO) massive copper-gold Oyu Tolgoi mine in Mongolia, Bloomberg is reporting based on information from unnamed insiders.

The news comes on the heels of a battle for control of the $6.6 billion controversial project between the world’s second largest mining company and the government of Mongolia. The parties announced yesterday they will meet on March 20 for further tough negotiations over the future of Oyu Tolgoi.

Operator Turquoise Hills Resources (TSX:TRQ) has already spent more than $6 billion on the mine in the south Gobi desert, which it is now operating under a temporary month-to-month budget from Rio’s coffers.

The giant miner, currently focused on selling non-core operations to curb costs and bolster its balance sheet, reported Friday it paid $11.6 billion in taxes last year, down 8% on 2011 as a result of its lower profits in 2012.

For the past three years Rio, which posted a $3 billion loss last year on impairment charges, has published the taxes that it pays “as governments move to adopt a regulatory approach to declaring all tax payments”, CFO Guy EIliott said in a statement.

The company noted that most of the taxes were paid in Australia, with over $8.9 billion outlaid to all levels of Australian governments last year. Canada ($1 billion), United States ($376 million), Chile ($331 million), Mongolia ($280 million), United Kingdom ($150 million), France ($140 million) and South Africa (US$130 million) were among other governments to have received significant tax payments from Rio last year.

(Image of a section of the main construction camp and administration centre of Oyu Tolgoi in February 2011, courtesy of Turquoise Hill)