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Rio Tinto to write off $2.3bn Oyu Tolgoi loan www.ft.com
Rio Tinto has agreed to write off $2.3bn it lent to Mongolia to cover the government’s share of the development costs for the giant Oyu Tolgoi copper mine.
The debt write off is part of a wider offer that the FTSE 100 company hopes will bring an end to longstanding tensions that have blighted the project, which is running late and over budget.
As well as the debt write-off, Rio has offered to terminate the underground development plan, agreed to an independent audit of the project’s financing and will make an additional investment, according to a letter seen by the Financial Times. This should allow the next phase of the mine’s development to begin in January.
Once complete, Oyu Tolgoi will be one of the biggest copper mines in the world, producing almost 500,000 tonnes of the metal. Rio is developing the project through its subsidiary Turquoise Hill Resources.
In a tweet, Mongolia’s Prime Minister Oyun-Erdene Luvsannamsrai said a government working group had accepted the offer and there was now “opportunity for mutually beneficial co-operation. However, the deal will need to be ratified by parliament”.
In an statement, the company said: “Rio Tinto and Turquoise Hill Resources have made an offer to the Government of Mongolia which aims to reset the relationship and allow all parties to move forward together.”
“The offer reflects months of discussion between Rio Tinto, TRQ and the Government of Mongolia to understand the Government’s issues and priorities, deliver greater economic value to Mongolia and build a stronger partnership for a prosperous future for all,” it added.
Published Date:2021-12-13
