Mongolia, Rio Tinto agree to amend Oyu Tolgoi contract, increasing Mongolia’s returns by MNT13tril

ULAANBAATAR: The government of Mongolia and Rio Tinto Group have reached an agreement to amend the Oyu Tolgoi project’s Shareholders’ Agreement, originally established 17 years ago, which is expected to increase Mongolia’s future returns from the copper and gold mining project by approximately MNT13 trillion (US$3.6 trillion).

The two sides also agreed that dividend distributions from the project in the Gobi Desert will begin in 2027.

Prime Minister Nyam-Osoryn Uchral announced on social media that the amendments include measures to reduce project costs. The total cost reduction is estimated at approximately MNT30 trillion, including about MNT8 trillion through lower management fees and the elimination of overlapping costs, and approximately MNT22 trillion through lower interest rates on shareholder loans.

Representatives of the Mongolian side also said the parties had reached a mutual agreement to begin dividend distributions in 2027 and increase Mongolia’s returns from the project.

Following the negotiations, Rio Tinto Chief Executive Simon Trott highlighted the progress made in cooperation between the two sides.

“Today, we have made significant changes to the shareholders’ agreement. We have reduced the interest rate on shareholder loans and lowered management service fees. This is a historic moment and represents very important progress.

Rio Tinto’s commitment to working with Mongolia on dividend distributions to Oyu Tolgoi shareholders and increasing Mongolia’s returns, adding that teams from both sides would continue working to reach and finalise a unified solution”, he said.

https://www.thestar.com.my