Mining company Rio Tinto remains committed to Oyu Tolgoi, in Mongolia, and is comfortable with the risk sharing and the stake that it has in the asset, which is one of the world’s largest-known copper and gold deposits.
Responding to an analyst’s question during the group’s year-end results call this week, CEO Jakob Stausholm said that Oyu Tolgoi was an “impressive mine” that would yield a “big win-win” for both the country and Rio Tinto.
“What it is about right now, is to have the right conversation and find the right solutions,” he said, although conceding that he did not know “exactly what the solution” was.
Stausholm said that Rio Tinto was working hard on building relationships in Mongolia, noting that the group had recently set a new team in that country.
The appointment of Mongolian national Bold Baatar as Rio Tinto CEO of copper operations in January is widely seen as an attempt to improve the miner's relationship with the government and to progress talks on the project.
The Mongolian government has expressed concern that the economic benefits of developing the mine have been eroded by significant cost increases. The underground project is set to cost between $1.3-billion and $1.8-billion more than the original $5.3-billion capital estimate.
Reports suggested last month that Ulaanbaatar may not continue with the underground expansion project.
Stausholm stressed that discussions with the government about increasing the benefits of Oyu Tolgoi for all stakeholders were constructive.
“Bold Baatar has already set his team and they have commenced discussions with the government of Mongolia.”
“If we both have an incentive to find solutions, and we have the right relationship, I remain convinced we will get to solutions.”
Oyu Tolgoi started producing in 2014 and has already delivered more than one-million tonnes of copper. When fully ramped up, it will be the world’s fourth largest copper mine.
The Mongolian government holds a 34% stake in the project with Rio's majority-owned Turquoise Hill owning the rest.