UPDATE 1-OYU Tolgoi copper mine agreement reached, Rio Tinto says

Mon May 18, 2015 6:43pm EDT
 
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(Adds quotes and details about the two-year delay)

SYDNEY May 19 (Reuters) - An agreement to develop the OYU Tolgoi copper mine in Mongolia has been reached, Rio Tinto said on Tuesday, ending a two-year hiatus that saw the underground project delayed amid disputes over costs and taxes after the open pit mine was built.

The Mongolian government, Turquoise Hill Resources and Rio Tinto reached an agreement regarding shareholder issues and setting out an agreed basis for funding the project, the global miner said in a statement.

Before the development can begin, Rio Tinto said the project will need to finalise financing, conduct a feasibility study and secure all necessary permits.

"OYU Tolgoi is a world-class copper-gold asset and its further development is of great economic significance for Mongolia," said Mongolian Prime Minister Chimediin Saikhanbileg.

"We have finalised a way forward with our partners which re-establishes the foundations of a new and constructive relationship based on mutual trust and our joint long-term commitment to Mongolia's growth." (Reporting by Colin Packham; Editing by Bernard Orr)