Britain’s financial watchdog is conducting a probe into Rio Tinto and its $6.75 billion underground copper project in Mongolia’s Gobi Desert, the Financial Times reported on Tuesday.
The Financial Conduct Authority (FCA) was investigating whether the Anglo-Australian miner breached listing rules in disclosures about the value of Oyu Tolgoi in 2018 and 2019, the report added, citing people familiar with the matter.
Rio reached a binding agreement with Turquoise Hill Resources Ltd earlier this year over funding for expansion of the copper-gold mine, whose development has faced cost and timeline blowouts and has caused acrimony between the mining giant and its junior partner.
The expansion of Oyu Tolgoi mine, Rio’s biggest copper growth project, has seen costs balloon up to $6.75 billion, about $1.4 billion higher than Rio’s estimate in 2016, and has led to friction over funding with Turquoise Hill.
Both FCA and Rio Tinto declined Reuters’ requests for comments.
Oyu Tolgoi, one of the world’s largest-known copper and gold deposits, is 34% owned by the Mongolian government. The rest is held by Turquoise Hill, in which Rio owns a 50.8% stake.
(By Indranil Sarkar; Editing by Krishna Chandra Eluri)