- Rio Tinto (NYSE:RIO) warns Mongolia's government not to tamper with the contracts that underpin its investment in the giant Oyu Tolgoi copper project if it wants to attract more foreign capital to the country.
- Arnaud Soirat, the head of Rio’s copper business, says Mongolia has all the ingredients to become a “successful resource nation” but only if it honored agreements around issues such as tax and royalty payments.
- Rio has invested more than $7B in the first phase of the Oyu Tolgoi and plans to spend another $5.5B on developing an underground mine that will unlock the project’s full potential, but this year the cash strapped government hit Rio with a $155M tax bill and the parliament set up a working group to review the agreements that underpin the development of the mine.
- “Protecting agreements and honoring contracts is critical, particularly in mining where time horizons are long and upfront investment is massive,” Soirat says.