Mongolia tries to calm fears Rio wrangle will delay giant mine

Thu Mar 14, 2013 5:52am EDT
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

* Important that production start on time-official

* Some politicians believe Rio taking advantage of country

* Government concerned rising costs will delay payoff for citizens

By Rujun Shen

SINGAPORE, March 14 (Reuters) - Mongolian officials tried on Thursday to calm fears that disagreements between the government and miner Rio Tinto Ltd would delay a planned June start of commercial production at the giant Oyu Tolgoi copper and gold mine.

Rio and Mongolia are at loggerheads over the future of one of the world's largest untapped copper deposits just as the mine ramps up output and the Rio subsidiary that owns it tries to line up $4 billion for the next stage of development.

The mine is operating under a temporary budget after the two sides failed to agree on a deal last month, having disagreed over taxes and rising costs that Mongolia fears will erode prospective earnings. They are set to meet again next week.

"The Mongolian government and the investor both highlight the importance that the production should start on time," Dorjsuren Javkhlanbold, a senior official at Mongolia's mines ministry, told Reuters on the sidelines of a conference.

"We have a joint understanding of what we are going to do. We need to make several clarifications (to) our investment agreement and we are confident the revision will soon be successful."   Continued...