Mongolia-Rio Tinto arbitration results expected to be out by first half of 2023

The government was required to submit its response and counterclaims for an international arbitration proceeding regarding Rio Tinto’s 2013-2015 tax assessment to the London Court of International Arbitration by April 30, 2021. Deputy Head of the Cabinet Secretariat B.Solongoo affirmed last Friday that the Mongolian side and its representing law firms have finalized the response and counterclaims and would submit them on time.

On February 20, Oyu Tolgoi LLC, jointly owned by Erdenes Oyu Tolgoi LLC on behalf of the Mongolian government of (34 percent) and Rio Tintocontrolled Turquoise Hill Resources (66 percent), initiated an international arbitration proceeding at the London Court of International Arbitration in accordance with the United Nations Commission on International Trade Law Arbitration Rules. The arbitration proceeding was for the tax assessment issued by the Mongolian Tax Authority relating to an audit on taxes imposed and paid by Oyu Tolgoi between 2013 and 2015 and another decision made by the Mongolian Professional Inspection Agency relating to unpaid royalties on Oyu Tolgoi molybdenum.

The authorities forecast the arbitration to continue for some time, with final ruling set to be made in 2023.

“The date for settling the dispute has been determined on a preliminary basis,” B.Solongoo stated. “At the moment, we’re expecting the court hearing to take place within the last week of August 2022. We’re hoping for the final ruling to come out in the first half of 2023.”

The arbitration proceeding is coinciding with the ongoing negotiation between the government and Rio Tinto. Sides held their first face-to-face meeting on April 12 and relayed their positions on what needs to be done to resume the multibillion-dollar Oyu Tolgoi copper-gold project in Mongolia. The Anglo-Australian delegation has returned to Australia and the second meeting has been postponed due to the COVID-19 pandemic situation in Mongolia. Rio Tinto has asked to respond to inquiries from the Mongolian side via email.

B.Solongoo added that an independent review has been launched to investigate into the cost blowout and schedule delays of the Oyu Tolgoi Project. However, Rio Tinto and its majorityowned Turquoise Hill are refusing to submit requested documents, slowing down the review process, she added.