Export income dispute holds up Rio's Oyu Tolgoi mine - Mongolia

Thu Jul 4, 2013 2:18am EDT
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

* Differences on keeping income in Mongolian banks, sales deals

* Oyu Tolgoi to account for almost a 3rd of Mongolian economy

* Weak Mongolian currency, falling commodities demand raise Rio's risk

By Terrence Edwards

ULAN BATOR, July 4 (Reuters) - The Mongolian government and Rio Tinto have not yet reached an agreement on whether the miner can repatriate earnings from the $6.2 billion Oyu Tolgoi mine, the country's mining minister said, delaying first copper shipments.

The dispute could heighten investor concerns about the risks of mining in Mongolia and threaten Rio Tinto's plans to grow its copper portfolio to ease dependence on iron ore.

Metals traders have been closely watching whether Rio gets official approval to export concentrate from Oyu Tolgoi amid a shortfall in shipments from the Grasberg mine in Indonesia, run by Freeport McMoRan Copper & Gold.

The unlocking of ore shipments would increase supply in top copper consumer China and boost treatment and refining charges charged by smelters there.

Exports from the copper and gold mine were initially due to start on June 14, but were then postponed to June 21, before the Mongolian government told Rio to delay them again without setting a date. Uncertainty over the reasons for the delay has slashed the share price of other Mongolian miners.   Continued...