Mongolian mine will ship metals soon – Rio

RIO TINTO planned to start shipments from its $6.6 billion (R60bn) copper and gold mine in Mongolia in the current half-year after “good discussions” with the government, the second-biggest mining company said yesterday.

The shares fell 1.19 percent to end at A$58.20 (R535) in Sydney yesterday.

“We’ve moved well down the path in terms of resolving the issues the government had tabled with us, enabling us really to move forward with the project,” Sam Walsh, the chief executive of Rio Tinto, said.

Rio Tinto and the Mongolian government are in discussions to mend a rift over alleged cost overruns at the Oyu Tolgoi mine, as well as management control of the mine.

Following the recent talks, it is aiming to make its first shipments in the current semester.

“We are still looking for some approvals in relation to how exactly we’ll transport and ship the material, but that we expect to receive in the next couple of weeks,” Walsh said after the firm’s annual general meeting in Sydney.

Oyu Tolgoi, in the South Gobi desert 80km from Mongolia’s border with China, is controlled by Rio Tinto through its 51 percent stake in Turquoise Hill Resources, which holds 66 percent of the project.

The company plans to build an underground expansion that has been estimated to cost $5.1bn, according to Turquoise Hill.

Walsh, who replaced Tom Albanese as chief executive this year, said in February that Rio Tinto would pursue an “unrelenting” focus on shareholder value.

Rio Tinto’s board is due to decide in the fourth quarter on whether to approve a $5bn expansion of its iron ore mines in Australia’s Pilbara region to 360 million tons a year, from 290 million tons. – Bloomberg