RPT-REFILE-Rio CEO to visit troubled Mongolia copper mine - sources

Thu Mar 26, 2015 6:19pm EDT
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(Repeats story first published late Thursday; no change to text)

By Terrence Edwards

ULAN BATOR, March 26 (Reuters) - Rio Tinto's chief executive will visit its $6.5 billion Oyu Tolgoi copper mine in Mongolia on Sunday, two people familiar with the visit said, amid signs the country's new prime minister is keen to end disputes that have delayed an expansion project.

Sam Walsh will visit the mine, located in the Gobi desert around 80 kilometers north of the Chinese border, to meet employees, said one of the sources, who asked not to be named because issues related to the mine are sensitive.

Time will also be made to greet members of the business community and some government officials, the source added.

Disputes over costs and taxes have delayed an expansion of the mine that would extend its life beyond its estimated 15 years. That has stoked investor worries about "resources nationalism", with several governments across the world looking to renegotiate contracts to get a bigger say in mining projects.

However, some analysts say Prime Minister Chimed Saikhanbileg is keen to reach a deal as Mongolia faces slowing growth in neighbour China and a softer market for its natural resources.

"Saikhanbileg's administration is Rio's best chance for a deal on Oyu Tolgoi phase two," said Nick Cousyn, chief operating officer of Ulan Bator-based broker BDSec.

"They (Rio) can either empower him by showing flexibility and respect, or risk losing Mongolia to the populist opposition."   Continued...