RIO TINTO-MONGOLIA AGREE $5.4 BILLION DEAL OVER OYU TOLGOI PROJECT, TO BOOST ECONOMY
Anglo-Australian mining giant Rio Tinto and Mongolia agreed a multi-billion-dollar expansion of a vast copper and gold mine, officials said Tuesday, ending a two-year dispute as Ulan Bator seeks to restore its foreign investor appeal.
The deal on the underground second phase of the Oyu Tolgoi project, estimated to cost $5.4 billion, comes with Mongolia looking to boost its flagging economic growth after foreign direct investment plummeted by three quarters last year.
Unlocking Oyu Tolgoi’s underground mine will have a significant impact on the Mongolian economy, which will benefit Mongolian citizens for generations to come.
Mongolia’s vast reserves of underground resources are estimated to be worth more than $1 trillion and it enjoyed world-leading economic growth in recent years — peaking at 17.5 percent in 2011 — on the back of a minerals boom exemplified by Oyu Tolgoi.
But efforts to extract the wealth have stumbled in the face of internal fighting over how much control and profit foreign companies should be allowed.
Oyu Tolgoi is a multi-billion-dollar deposit and when it is in full production it is expected to provide as much as one-third of Ulan Bator’s annual revenues.