UPDATE 1-Job cuts ahead as Rio puts Mongolian expansion on hold

Wed Aug 14, 2013 11:15am EDT
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

* Company announces 1,700 redundancies

* Delay is latest hiccup for Rio, government

* Project vital for co-owners

LONDON, Aug 14 (Reuters) - Rio Tinto said on Wednesday it would have to cut up to 1,700 jobs in its Mongolian operation, after a more than $5 billion underground expansion of the giant Oyu Tolgoi copper mine was suspended.

The expansion was put on ice last month as the global miner said the Mongolian government wanted parliament, currently in recess, to approve financing for the project.

Mongolian Prime Minister Norov Altankhuyag said last week that Rio did not need to seek parliamentary approval for the development's package.

The delay marked the latest bump in the road for Rio at one of its biggest projects - and one of the world's largest untapped copper deposits - which started exporting from an open pit mine in July after two last-minute hiccups in securing government approval.

Mongolia has raised concerns about the costs of the Oyu Tolgoi expansion and the potential that rising expenditure will delay when it starts receiving its share of profits. .

The government has also complained that locals are not well represented in the management of the project.   Continued...