1 ZANDANSHATAR GOMBOJAV APPOINTED AS PRIME MINISTER OF MONGOLIA WWW.MONTSAME.MN PUBLISHED:2025/06/13      2 WHAT MONGOLIA’S NEW PRIME MINISTER MEANS FOR ITS DEMOCRACY WWW.TIME.COM PUBLISHED:2025/06/13      3 ULAANBAATAR DIALOGUE SHOWS MONGOLIA’S FOREIGN POLICY CONTINUITY AMID POLITICAL UNREST WWW.THEDIPLOMAT.COM PUBLISHED:2025/06/13      4 THE UNITED NATIONS CHILDREN’S FUND (UNICEF) IN MONGOLIA, THE NATIONAL FOUNDATION FOR SUPPORTING THE BILLION TREES MOVEMENT, AND CREDITECH STM NBFI LLC HAVE JOINTLY LAUNCHED THE “ONE CHILD – ONE TREE” INITIATIVE WWW.BILLIONTREE.MN PUBLISHED:2025/06/13      5 NEW MONGOLIAN PM TAKES OFFICE AFTER CORRUPTION PROTESTS WWW.AFP.MN PUBLISHED:2025/06/13      6 GOLD, MINED BY ARTISANAL AND SMALL-SCALE MINERS OF MONGOLIA TO BE SUPPLIED TO INTERNATIONAL JEWELRY COMPANIES WWW.MONTSAME.MN PUBLISHED:2025/06/13      7 AUSTRIA PUBLISHES SYNTHESIZED TEXTS OF TAX TREATIES WITH ICELAND, KAZAKHSTAN AND MONGOLIA AS IMPACTED BY BEPS MLI WWW.ORBITAX.COM  PUBLISHED:2025/06/13      8 THE UNITED STATES AND MONGOLIA OPEN THE CENTER OF EXCELLENCE FOR ENGLISH LANGUAGE TEACHING IN ULAANBAATAR WWW.MN.USEMBASSY.GOV  PUBLISHED:2025/06/12      9 MONGOLIA'S 'DRAGON PRINCE' DINOSAUR WAS FORERUNNER OF T. REX WWW.REUTERS.COM PUBLISHED:2025/06/12      10 MONGOLIA’S PIVOT TO CENTRAL ASIA AND THE CAUCASUS: STRATEGIC REALIGNMENTS AND REGIONAL IMPLICATIONS WWW.CACIANALYST.ORG  PUBLISHED:2025/06/12      БӨӨРӨЛЖҮҮТИЙН ЦАХИЛГААН СТАНЦЫН II БЛОКИЙГ 12 ДУГААР САРД АШИГЛАЛТАД ОРУУЛНА WWW.MONTSAME.MN НИЙТЭЛСЭН:2025/06/15     ОРОН СУУЦНЫ ҮНЭ 14.3 ХУВИАР ӨСЖЭЭ WWW.EGUUR.MN НИЙТЭЛСЭН:2025/06/15     МОНГОЛ УЛСЫН 34 ДЭХ ЕРӨНХИЙ САЙДААР Г.ЗАНДАНШАТАРЫГ ТОМИЛЛОО WWW.MONTSAME.MN НИЙТЭЛСЭН:2025/06/13     SXCOAL: МОНГОЛЫН НҮҮРСНИЙ ЭКСПОРТ ЗАХ ЗЭЭЛИЙН ХҮНДРЭЛИЙН СҮҮДЭРТ ХУМИГДАЖ БАЙНА WWW.ITOIM.MN НИЙТЭЛСЭН:2025/06/13     МОНГОЛ БАНК: ТЭТГЭВРИЙН ЗЭЭЛД ТАВИХ ӨР ОРЛОГЫН ХАРЬЦААГ 50:50 БОЛГОЛОО WWW.EGUUR.MN НИЙТЭЛСЭН:2025/06/13     МОНГОЛ ДАХЬ НҮБ-ЫН ХҮҮХДИЙН САН, ТЭРБУМ МОД ҮНДЭСНИЙ ХӨДӨЛГӨӨНИЙГ ДЭМЖИХ САН, КРЕДИТЕХ СТМ ББСБ ХХК “ХҮҮХЭД БҮРД – НЭГ МОД” САНААЧИЛГЫГ ХАМТРАН ХЭРЭГЖҮҮЛНЭ WWW.BILLIONTREE.MN НИЙТЭЛСЭН:2025/06/13     ЕРӨНХИЙЛӨГЧИЙН ТАМГЫН ГАЗРЫН ДАРГААР А.ҮЙЛСТӨГӨЛДӨР АЖИЛЛАНА WWW.EAGLE.MN НИЙТЭЛСЭН:2025/06/13     34 ДЭХ ЕРӨНХИЙ САЙД Г.ЗАНДАНШАТАР ХЭРХЭН АЖИЛЛАНА ГЭЖ АМЛАВ? WWW.EGUUR.MN НИЙТЭЛСЭН:2025/06/13     “АНГЛИ ХЭЛНИЙ МЭРГЭШЛИЙН ТӨВ”-ИЙГ МУИС-Д НЭЭЛЭЭ WWW.MONTSAME.MN НИЙТЭЛСЭН:2025/06/13     Г.ЗАНДАНШАТАР БАЯЛГИЙН САНГИЙН БОДЛОГЫГ ҮРГЭЛЖЛҮҮЛНЭ ГЭЖ АМЛАЛАА WWW.EGUUR.MN НИЙТЭЛСЭН:2025/06/12    

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MBCC “Doing Business with Mongolia seminar and Christmas Receptiom” Dec 10. 2024 London UK MBCCI London UK Goodman LLC

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Medicinal plants are possible to be exported to India www.montsame.mn

Mongolia is possible to export products including medicinal plants and sea buckthorn to India.
Mongolia and India have been expanding cooperation since their establishment of diplomatic relations in 1964.The two countries are jointly implementing major projects and programs to further develop a comprehensive strategic partnership. In addition, meetings and consultations are planned to be organized to improve economic relations and increase trade turnover.
MNCCI Secretary General S.Bayasgalan said, “The MNCCI is working to co-organize a Mongolian-Indian Investment and Business Forum with the Embassy of India on March 25. In connection with the ‘New Revival Policy’ announced by the Government, new projects and investment opportunities will be introduced to investors.”
Executive Director of the Mongolian-Indian Business Council V. Gantulga noted, “India is one of the largest providers in the global medicine market, and its vaccine manufacturers supply the global market alone. Therefore, Mongolia is fully possible export semi-processed medicinal plants to India.”
Attaching much importance to the cooperation with Mongolia, India’s businessmen and investors held several meetings on establishing contacts with Mongolian businesses. The sides are focusing on further strengthening and expanding the trade and economic relations.
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Antler gathering banned in Mongolia for year www.xinhuanet.com

Mongolia will impose a one-year ban on collecting deer antlers, the country's Ministry of Environment and Tourism said Tuesday.
"In order to prevent ecological imbalance and damage to forest resources due to forest and grassland fires, citizens and legal entities have been prohibited from collecting and preparing deer antlers for a period of one year," the ministry said in a statement.
A total of 65 wildfires were reported across Mongolia in 2021, causing 3.1 billion Mongolian Tugriks (over 1 million U.S. dollars) in environmental damage, the ministry said.
One of the main causes of wildfires was human error, the ministry said, noting that many people who went to forests to collect cedar nuts and deer antler threw cigarette butts which caused fires.
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Rio copper chief says $3.76b copper bid ‘quite friendly’ www.afr.com

Rio Tinto copper boss Bold Baatar sought to play down the company’s fractious relationship with its Canadian buyout target Turquoise Hill Resources, as the Toronto-listed company’s shares leapt to match the $US2.7 billion ($3.76 billion) offer.
Investors and analysts said the move to buy out the 49 per cent of the Canadian company that it did not already own – which would streamline its ownership of Mongolia’s Oyu Tolgoi copper and gold mine – made sense.
However, they said there was no certainty that the deal would go ahead at this price, and the target’s shares jumped 32.5 per cent to $C34.02 ($36.98) on Monday Canadian time to just pip Rio’s $C34 bid price.
Argo Investments chief executive Jason Beddow, whose fund is one of the 20 largest investors in Rio Tinto, noted that the first bid was not always the last. He said simplifying the ownership structure of the troubled Mongolian mine was a good move, particularly as miners sought more exposure to copper.
Turquoise Hill owns 66 per cent of Oyu Tolgoi and the Mongolian government owns the rest.
“A joint venture is always a messy structure at the best of times,” he said. “Buying something you own half of already, you know it pretty well.”
Oyu Tolgoi, one of the largest copper projects in the world, has been a challenging project for Rio Tinto.
The project has spent $US13.4 billion in Mongolia since 2010, including operating costs and other items not directly associated with development. Rio itself has spent a little more than $US6 billion the project.
Government deal
However, in late January, Rio struck a deal with the Mongolian government that included writing off the government debt. The deal allowed the miner to develop plans to turn the open cut mine into an underground one more quickly, as the government softened its requirement to use a Mongolian energy generator.
The push to develop the project comes amid moves from miners to increase exposure to the raw materials that will be needed in the shift to a low-carbon economy. Copper is used in electric vehicles and wind turbines.
Macquarie analysts noted that if Rio Tinto acquired the remaining 49 per cent of Turquoise Hill, the company would boost its copper production by 10 per cent over the next five years and 17 per cent on average for the next 10 years.
Mr Baatar on Monday night dismissed views that Turquoise Hill shareholders were being held over a barrel by the prospect of a large equity raising if they did not accept the offer.
He refuted that the timing of the bid was “hostile” and said: “I don’t think it’s a massive threat with the rights offering.”
Mr Baatar said the group had the option of rescheduling loan payments, raising new loans, as well as issuing new equity. He also acknowledged that credit markets were not facing ideal conditions at the moment.
“Obviously, they’re subject to the credit market conditions and considering what’s happening in Russia, Ukraine, not an easy one,” he said.
One of Turquoise Hill’s largest shareholders, Pentwater Capital Management, has already accused Rio Tinto of “oppressive” behaviour towards its smaller shareholders. The fund manager threatened legal action if Rio Tinto forced a dilutive, multibillion-dollar equity raising.
Turquoise Hill needs to raise between $US1.7 billion ($2.3 billion) and $US3.6 billion to cover massive cost and schedule blowouts on Oyu Tolgoi.
‘Friendly approach’
In relation to equity financing as an option, Mr Baatar said that Rio had committed its own to help with bridging funding for the mine.
“So it’s actually a pretty reasonable and quite friendly approach on this,” he said.
In its note following Rio Tinto’s offer, Morgan Stanley analysts listed four reasons that it made sense for the mining giant to try and acquire Turquoise Hill now.
This included de-risking of the project after Rio’s agreement with the Mongolian government; a better operating and management structure as the mine transitions to underground; and a scarcity of copper asset to build or acquire. The broker also noted “a clean structure could enable Rio Tinto to carry through its culture/governance/sustainability objectives at Oyu Tolgoi”.
Merrill Lynch analysts noted that an alternative to the bid – for which it said Rio was paying a premium without a change of control, as it already owns 51 per cent of Turquoise Hill – would probably have been an equity raise and more project financing, leading to a “complicated” situation.
On Monday’s call, Mr Baatar said Rio would be disciplined about acquiring Turquoise Hill.
“I think it’s a fair offer. Obviously, it’s for shareholders to decide. We’re going to be disciplined,” he said.
“And obviously, if investors choose to stay in the project and, you know, over time, reject the offer, then at least ... we’re on the same page in terms of our long-term commitment to development of the project.”
BY: Jemima Whyte writes on business, specialising in companies, capital markets and innovation. Jemima has reported on business for The Australian Financial Review for more than 13 years. Email Jemima at jemima.whyte@afr.com
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Turquoise Hill shareholders could score big with Rio’s bid www.mining.com

Shareholders in Canadian miner Turquoise Hill Resources (TSX, NYSE: TRQ), the majority owner of the vast Oyu Tolgoi copper-gold mine in Mongolia, are poised to cash in on Rio Tinto’s $2.7bn offer to buy the remaining 49% of the company it doesn’t already own, analysts say.
While the non-binding buyout proposal is considered “generous” — a 32% premium to Friday’s closing price — it also reflects Rio’s lack of strategic wiggle room under the current capital structure.
Rio Tinto currently controls and operates the Oyu Tolgoi mine, located is 550 km (342 miles) south of Mongolia’s capital Ulaanbaatar via Turquoise Hill’s 66% stake. The government of Mongolia owns 34%.
Market observers believe Turquoise Hill’s investors could get a sweeter deal. Analysts at Scotiabank predict that the company’s shareholders will seek a materially higher offer from Rio Tinto than the C$34/share offer price, perhaps greater than C$50/share.
The world’s second largest miner has the financial resources to pay a higher premium. As of December Rio had $1.6 billion of net cash, while high iron ore prices are adding to that pile. The company’s willingness pay up is not so clear, which makes a transaction highly uncertain.
Acquiring the Vancouver-based miner would boost Rio Tinto’s copper output by 10% over the next five years, 17% on average over 10 years, and by more than 30% from 2032, according to Macquarie.
The bank noted that Rio’s offer might be a 32% premium to Turquoise closing price on Friday but is a narrower 12% premium to the bank’s target on the stock.
Crown jewel
Analysts at Jefferies believe that Oyu Tolgoi would become a “crown jewel” in Rio Tinto’s portfolio. They also see the acquisition as an opportunity to straightened up the project’s messy capital structure, which has been one of the reasons why the underground copper mine has suffered delays.
“This transaction would increase Rio’s attributable copper production via an asset that it has developed, currently operates, and clearly knows well,” Jefferies’ note says.
UBS experts warn that while the Mongolian mine is a high-quality deposit, it is in a challenging jurisdiction, which could make it an “overall poor investment.”
They also noted the timing could be off given Turquoise Hill’s stock has risen 254%, to C$34.04 from C$9.6, since January 2021, and it fears cash returns will be dented this year, with Rio Tinto having now directed about $3.5 billion to mergers and acquisitions.
Alexander Pearce and David Gagliano of BMO Capital Markets, noted that the company’s strategy over its stake in Turquoise Hill has been subject to discussion for many years, adding that the acquisition could “make sense.”
“In the past Rio Tinto has been happy to share the risk of its assets with minority shareholders, however, given the dearth of copper opportunities elsewhere, perhaps increasing its exposure to Oyu Tolgoi now makes sense and could simplify the remaining funding hurdles for the underground project,” they wrote in a note to clients.
Biggest new copper mine
Rio Tinto has had a rocky relationship with the Vancouver-based miner, particularly over how to fund Oyu Tolgoi’s expansion. The top miner has also drawn criticism from some of Turquoise Hill’s minority shareholders about the control it exerts over the company.
“Given the dearth of copper opportunities elsewhere, combined with its recently lowered risk profile, perhaps increasing its Oyu Tolgoi exposure now makes sense,” Pearce and Gagliano wrote.
Once completed, the underground section of Oyu Tolgoi will lift production from 125,000–150,000 tonnes in 2019 to 560,000 tonnes at peak output, which is now expected by 2025 at the earliest. This would make it the biggest new copper mine to come on stream in several years.
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"The opening of the Hangi-Mandal port will create the second Gashuunsukhait and the second Zamyn-Uud." www.montsame.mn

Prime Minister L. Oyun-Erdene delivered remarks at the ceremony to commence the construction of railway en route Zuunbayan-Khangi on March 11.
“Dear Mongolian Citizens,
Dear guests and representatives, gathered with us today to witness today’s such historical event;
To successfully sustain the resources and backgrounds of the long-term development plan of Mongolia, to resolve matters that pose limits to developments in a short span of time, and to extend economic circumferences, “The New Revival Policy” suggested by the Mongolian Parliament has been activated since the 1st of January of 2022. We successfully managed to start the implementation of underground mining by Oyu-Tolgoi, which was the first important task of the policy.
And we are gathered here today to celebrate the start of building 226kms of railroads between Zuunbayan-Khangi, the second big project of “The New Revival Policy”, with the partnership of private and public enterprises, with a goal of finishing it within half a year.
You may recall when the “The New Revival Policy” was passed by the State Great Assembly, I said that “ We could not be discussing of progress without resolving the issues of border points when our economy only relied on mining, state budget only consisted of coal, petrol was imported from only one country, and the importing was connected to only one border point where we were feeling the impacts even more during covid times, and our economy was in worse shape.”
That is why I promoted the construction of connecting all border points via roads, railroads, and highways in consecutive steps in no time and to extend the economic background of it in the spectrum of “The New Revival Policy”.
Having no access to the sea, out of 42 dry road border points, only 3 of them, Sukhbaatar, Ereentsav, and Zamiin Uud are connected by railroads.
About half the amount of export of copper and copperized coal, which are the main parts of our export, are passed solely by Gashuunsukhait whereas the 70 % import of common use goods is passed by Zamiin Uud border point.
Khangi border point is located exactly at the middle point of Gashuunsukhait and Zamiin Uud and that makes it a geopolitically strategic point.
By connecting the Hangi-Mandal port with a railway and opening a new gateway as our country's import and export capacity will increase by a total of 20 million tons, and the total volume of rail transportation will increase by 65 percent, respectively. With the commissioning of the Zuunbayan-Khangi railway, transportation to Baotou, China, the country's main mining export market, will be shortened by 242 kilometers, saving transportation costs and time.
In other words, the opening of the Hangi-Mandal port will create the second Gashuunsukhait and the second Zamyn-Uud.
180 companies and more than 3,500 workers will take part in the construction of the 226-kilometer Zuunbayan-Khangi railway, which will create more than 1,300 new permanent jobs. This construction is a branch of the Zuunbayan railway, creating the first tripartite railway junction in Mongolia.
Dear investors,
Mongolia is starting construction of a railway linking the Hangi port with the Chinese port of Mandal today.
This month, the Government of Mongolia is racing to complete the 416-kilometer Tavan Tolgoi-Zuunbayan railway. The Hangi-Mandal railway will be operational in half a year and will connect the Tavan Tolgoi-Zuunbayan railway to transport Oyu Tolgoi copper concentrate, Tavan Tolgoi coking coal, and other export products through a new market based on free-market competition, and increase the value of mineral deposits in the Gobi region and new opportunities for economic circulation will open up.
As the Prime Minister of Mongolia, I would like to reiterate that we are always ready to cooperate with investors and companies in a mutually beneficial manner within the framework of the “Revival Policy” proposed by the Government of Mongolia.
Dear Mongolians,
I would like to emphasize today that the start of construction of the Zuunbayan-Khangi railway is an important step in increasing exports, creating rapid economic growth, and ensuring economic independence and autonomy.
A pandemic and difficult economic challenges continue around the world. But we must not give up on the goals we set for Mongolia's revival amid the crisis. On the contrary, we must work together more than ever to overcome difficulties and achieve our goals and objectives!
On behalf of the Government of Mongolia, I would like to wish the investors, companies, engineers, technicians, and the armed forces every success in their work in completing the 226-kilometer Zuunbayan-Khangi railway in the first half of the year, and a happy reunion on opening day.
Let’s implement the revival policy nationally,
May Mongolia prosper!”
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Meeting of Mongolia-EU Subcommittee on trade and Investment held www.montsame.mn

An online meeting of the European Union-Mongolia Subcommittee on Trade and Investment under the auspices of the Joint Committee was held on March 10, 2022. Mr. Ulziisaikhan Ganbold, Director-General of Foreign Trade and Economic Development Department of the Ministry of Foreign Affairs of Mongolia, chaired the online meeting from the Mongolian side, while Mr. Marco Chirullo, Deputy Head of Unit, DG TRADE, co-chaired the meeting from the EU side.
The subcommittee meeting participants exchanged views on increasing the benefits of the EU Generalized Scheme of Preferences (GSP+) for Mongolian exporters as well as on the importance of implementing 27 international conventions on labour, environment, human rights, good governance and complying with other GSP+ requirements. It was also agreed to further promote the Registered Exporter System (REX) and solve minor technical problems that arose during the implementation in Mongolia.
The parties informed each other on the socio-economic developments and identified potential areas of cooperation in synergy with the development agendas of Mongolia and the European Union. To support the bilateral trade and cooperation, the parties discussed the start of negotiations on geographical indications agreement, as well as opportunities in the field of renewable energy and geology.
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“Industrial and technology parks will be established in satellite cities” www.montsame.mn

On March 14, the Parliamentary Standing Committee on Industrial Policy organized a discussion on the bill for industrial and technology parks.
The bill for the revised law was introduced by MP S.Byambatsogt. The Law on Industrial and Technology Parks was approved by the State Great Khural in 2009. Despite over 10 years having passed since its adoption, the fact that there has yet to be any industrial, technological parks working in full capacity shows that the law is being insufficiently implemented.
According to an assessment carried out by the Parliamentary Office, it was found that there are certain factors creating hurdles in the law’s implementation such as undefined financial resources, no favorable tax environment, and too short of a duration for the corresponding special permission.
As of today, 11 entities have obtained special permissions for industrial and technology parks.
The bill for the revised law is being developed in a way that defines the legal basis for industrial and technology parks, the parks’ main goal, its types, organizational structure, operations as well as government support and corresponding monitoring. For instance, through the revised law, opportunities are planned to be created for entities that are newly entering the sector by exempting them from tax, and comprehensively resolving their engineering infrastructure issues.
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98.5 percent of nitrogen fertilizers being imported from Russia www.montsame.mn

Mongolia imports more than 98 percent of its nitrogen fertilizers, 98.4 percent of wagon imports (goods transported by railway), 88.6 percent of oil products, 84.3 percent of natural gas and 62 percent of iron armature from Russia.
Last year, USD 5.9 billion was spent on imports of non-food products, with 38.4 percent of this amount being imports from European countries and 27.5 percent from Russia.
According to the National Statistics Office of Mongolia, 46.8 percent of pharmaceutical products, 54.5 percent of body skin care products and 49.1 percent of detergents were imported from European countries.
 
 
 
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Rio Tinto bids $3.67b to get troubled Mongolian copper mine on track www.smh.com.au

Rio Tinto has launched a $US2.7 billion ($3.7 billion) bid to assume full ownership of the Canadian company that owns 66 per cent of the giant Oyu Tolgoi copper project in Mongolia.
The Anglo Australian miner has offered $C34 a share to buy out the 49 per cent of Turquoise Hill that it does not already own, offering a 32 per cent premium to the last closing price on the Toronto Stock Exchange.
Rio Tinto chief executive Jakob Stausholm said the company strongly believed in the long-term future of the mine.
“That is why we want to increase our interest in Oyu Tolgoi, simplify the ownership structure, and further strengthen Rio Tinto’s copper portfolio,” he said.
Mr Stausholm said a successful transaction would provide a more efficient corporate structure and allow Rio Tinto to directly deal with the Mongolian government, which owns 34 per cent of the project.
No agreement has been reached between Rio Tinto and Turquoise Hill.
The bid comes just weeks after Rio Tinto and Turquoise Hill cancelled $US2.4 billion ($3.3 billion) in debt owed by the Mongolian government to settle years of disputes and delays that have plagued the mining giant’s plans to enlarge the Oyu Tolgoi copper project.
The two companies described the deal as a “reset” of their relationship with the host nation by increasing the financial benefits staying in the developing nation. The agreement allowed underground mining operations to commence on a $US6.9 billion expansion.
In its announcement to the market after close, Rio Tinto said should Turquoise Hill investors not accept its offer “Rio Tinto welcomes their continued investment and equal share of future risks and funding obligations.”
Rio Tinto’s bid comes less than a week after copper prices hit a record high, along with other commodities, due to concerns about supply disruptions due to the Russian invasion of Ukraine.
Oyu Tolgoi is one of the world’s biggest-known copper and gold deposits. It has had significant delays since construction began in 2019 and the estimated cost has increased from $US5.3 billion to $US6.9 billion.
Copper demand is expected to grow strongly in coming decades as the electrification of industry and transport to reduce carbon emissions will require huge quantities of electrical wiring.
Rio Tinto’s progress in growing its exposure to copper comes after its push into lithium, another of the key raw materials needed to build electric cars, faced a setback in January.
The Serbian government revoked its licences to develop the $US2.4 billion Jadar lithium mine following months of large-scale public protests over the project’s potential environmental impacts.
By Peter Milne
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Rio in $3.7b bid to take control of Oyu Tolgoi www.afr.com

Rio Tinto has moved to take control of the Oyu Tolgoi project in Mongolia, making a $US2.7 billion ($3.7 billion) bid for the company behind the troubled copper mine, as chief Jakob Stausholm continues his push to tidy up problem issues of the past.
Signalling the mining majors are turning their minds to acquisitions amid the boom in commodity prices, Rio on Monday revealed plans to buy the about 49 per cent of Toronto-listed Turquoise Hill it does not already own.
Under the terms of the deal, Turquoise Hill minority shareholders would receive $C34 a share, representing a premium of 32 per cent to its last closing price.
Rio Tinto CEO Jakob Stausholm: “We believe the terms of proposal are compelling for Turquoise Hill shareholders.” Trevor Collens
If successful, the deal would see Rio hold a 66 per cent interest in Oyu Tolgoi, with the remaining 34 per cent owned by the Mongolian government.
It comes after Rio in January struck a deal with the Mongolian government to resolve the major disputes that have hampered progress on a $US6.9 billion expansion of Oyu Tolgoi, agreeing to waive a $US2.4 billion debt the government owed. In exchange, Mongolia softened its stance on several matters, most notably its desire for the mine to get all of its power from a Mongolian generator by July 2023.
Rio said the bid would simplify the Oyu Tolgoi ownership structure after the recent “reset” of the relationship between the project’s partners and strengthen its copper portfolio. It would also give Turquoise Hill’s minority shareholders an attractive exit “at a time when uncertainties inherent in the development of the underground operations and funding of such development remain”, Rio added.
“Rio Tinto strongly believes in the long-term success of Oyu Tolgoi and Mongolia, and delivering for all stakeholders over the long term,” Mr Stausholm said. “That is why we want to increase our interest in Oyu Tolgoi, simplify the ownership structure, and further strengthen Rio Tinto’s copper portfolio.
Relationship reset
“We believe the terms of proposal are compelling for Turquoise Hill shareholders.
“[It] would enable Rio Tinto to work directly with the government of Mongolia to move the Oyu Tolgoi project forward with a simpler and more efficient ownership and governance structure. With our relationship reset and the underground operations commenced, this transaction demonstrates our clear and unequivocal long-term commitment to Mongolia.”
Rio is being advised by Credit Suisse, RBC Capital Markets and Rothschild.
Turquoise Hill is yet to comment on the bid.
The move comes after Mr Stausholm last month held a roundtable with sell-side analysts where he flagged he was “happy with its mix, but is looking for modest growth, not big M&A”, according to Barrenjoey’s Glyn Lawcock.
“Rio is now looking for modest growth through value-accretive developments that Rio can grow and not through conducting large-scale M&A,” he said. “Within copper, Rio has growth options with the underground expansion at Oyu Tolgoi, while Winu is not for sale at the moment, as the resource is still being defined.”
Juukan Gorge scandal
Since replacing Jean-Sebastien Jacques in January 2021 following the Juukan Gorge scandal, where the mining giant destroyed prized cultural heritage in the Pilbara, Mr Stausholm has been addressing several lingering challenges, including releasing a bombshell report into its culture revealing systemic bullying, with common instances of sexual harassment and racism.
Rio has also battled sizeable cost blowouts for Oyu Tolgoi’s underground expansion, contributing to the miner’s enduring fractious relationship with the Mongolian government.
Turquoise Hill requires a further $US3.4 billion to complete the underground expansion, which would supercharge the project that Rio has mined from a small open pit mine since 2011.
Macquarie’s analysts on Friday lifted their copper price forecasts 7-16 per cent over 2022 and 2023, saying they “continue to see value in Rio, which is benefiting from iron ore, aluminium and copper prices”.
In 2021, Rio’s copper earnings before interest, taxes, depreciation, and amortisation soared 90 per cent to $US4 billion on the back of a 50 per cent jump in prices, supported by strong demand amid the global economic recovery and decarbonisation trends.
It expects Oyu Tolgoi’s underground operations to begin production in the first half of 2023.
Michael Bennet is WA reporter for The Australian Financial Review based in Perth. He has worked as a journalist for more than a decade, including at The Australian where he was senior banking reporter and also covered economics, markets and deals. Connect with Michael on Twitter. Email Michael at michael.bennet@afr.com
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