ULAN BATOR/MELBOURNE, July 30 (Reuters) - Rio Tinto is likely to appoint a Mongolian to head its $6.2 billion Oyu Tolgoi copper and gold mine as the company looks to patch up ties with the government amid disputes over costs and management at Mongolia's biggest project.
Bold Baatar, who was named president of Rio Tinto's international copper operations in April after advising the company for three years, is seen as the person most likely to replace Cameron McRae as president and chief executive of Oyu Tolgoi, two people familiar with the process said.
A Rio Tinto spokesman in Melbourne declined to comment on who was in the running to replace McRae or when an announcement would be made.
Appointing Bold would address a key complaint of the Mongolian government that locals are not well represented in the management of the project.
Bold is a well-known businessman in Mongolia, participating on the board of the Business Council of Mongolia as well as being chairman of the Mongolian National Mining Association and former chairman of the Mongolian Stock Exchange.
"Picking a Mongolian to run such a big Mongolian business project will go a long way in bridging the gap between Rio, the Mongolian government, and its people," said Badral Munkhdul of the marketing intelligence firm Cover Mongolia.
"It'll be a big vote of confidence for Rio to entrust the top position of the most important development project to a local Mongolian with international expertise, and to run a project of this scale," Badral said.
Bold would be taking on the position after Rio Tinto this week put on hold a $5 billion underground expansion of Oyu Tolgoi after being told that Mongolia's parliament would have to approve financing for the project.
Parliament is now in recess and is not due to sit again until October. Rio warned on Monday the parliamentary process may take some time to work through.
The project financing delay sent shares in Rio Tinto's Turquoise Hill unit down 20 percent to a 4-1/2 year low on Monday. Turquoise Hill owns a 66 percent stake in Oyu Tolgoi, with the rest owned by the Mongolian government.
Bold's current role is to oversee copper projects and sites in Australia, South Africa, Papua New Guinea, Indonesia and Alaska and divestments in the copper group, including the $820 million sale of the Northparkes mine announced this week.
A former investment banker with JPMorgan in London, Moscow and New York, Bold was hired from a gold explorer and before that ran a Mongolian investment company.
McRae will be leaving Rio Tinto in October, having overseen the successful start-up of the massive mine, the company said in a memo to staff last week.