Rio Tinto’s troubles in Mongolia worsened last night, after the mining giant’s subsidiary received a request for information from the country’s anti-corruption agency.

The miner, which is developing a copper and gold project in the Gobi desert, confirmed that its Mongolian subsidiary, Turquoise Hill Resources, had received an “information request” from the Mongolian Anti-Corruption Authority (ACA).

The London-listed global mining company digs up metals and ores including iron, aluminium, copper, gold and uranium, plus diamonds, coal, salt and other minerals. It employs 55,000 people in 40 countries on six continents.

The request to Turquoise Hill Resources was linked to preliminary discussions held nine years ago over the Oyu Tolgoi mining project, one of Rio Tinto’s global growth projects.

“The request relates to an investigation about possible abuse of power by authorised officials during negotiation of the 2009 Oyu Tolgoi Investment Agreement. There is no indication in the information request to suggest that Oyu Tolgoi is a subject of the investigation,” the company said.

Rio Tinto has a 50.8 per cent stake in Turquoise Hill, which in turn controls a 66 per cent stake in Oyu Toglu. Mongolia’s government owns the other 34 per cent.

Rio Tinto, which aims to invest $5 billion in an expansion of the mine, has experienced a series of problems in Mongolia amid increasing tension with the government.

Relations deteriorated in 2013, when a dispute arose over costs and taxes linked to the project. That was settled in 2015 but further problems surfaced in January when Rio had to suspend shipments of copper and gold after a dispute at the border with China.

Turquoise Hill, which is listed in Canada, was also hit with a $155 million tax claim. The company has disputed the claim.

Since 2010 Rio has ploughed more than $7 billion of investment into Mongolia, which has abundant reserves of minerals, especially copper.

The country’s proximity to China, the world’s biggest copper consumer, has attracted investors hopeful of brisk growth in demand for the metal, which is widely used in the manufacture of everything from electric cars to electronics and pipes.

Recently, however, shareholders have begun to question the wisdom of the project, amid criticism of Rio’s disclosures on the risks associated with the Oyu Tolgoi mine.

The Anglo-Australian mining group is also embroiled in a row with the government in Ulaanbaatar, the capital of Mongolia, over power for the mine, after it scuppered a deal to take its electricity from China.

The group is now pursuing an alternative plan to build a power station at the site, which is expected to drive up costs significantly .

In January Jean-Sébastien Jacques, Rio Tinto’s chief executive, said: “Mongolia is one of Rio Tinto’s most strategically important markets and we are here to stay. We are proud to partner with Mongolia to build one of the best copper and gold mines in the world, supplying the essential materials used in everyday life.”

Published Date:2018-03-14