Mongolian government approves Oyu Tolgoi resolution
Mongolia’s Parliament has unanimously approved a resolution that reconfirms the validity of all the mine-related agreements since 2009 for the Oyu Tolgoi Mine.
Rio Tinto reported that the resolution instructs the government to look for ways to improve the implementation of the Investment Agreement of 2009, the Amended & Restated Shareholder Agreement of 2011 and to improve the Underground Mine Development & Financing Plan of 2015.
The passing of this resolution effectively re-confirms the validity of all the investment agreements between the government of Mongolia, Rio Tinto and Turquoise Hill Resources. This brings to a close an over 18-month review by the Parliamentary Working Group of Oyu Tolgoi and the investment agreements governing the business, Rio Tinto wrote in a statement.
“Rio Tinto acknowledges the Mongolian Parliament’s Resolution and notes that this effectively confirms the validity of all Oyu Tolgoi investment agreements,” said Arnaud Soirat chief executive Copper & Diamonds. “Adherence to these agreements by all parties has underpinned a total in-country spend of around $10 billion since 2010, which has delivered significant benefits to the people of Mongolia and will continue to do so for decades to come.
The passing of the resolution brings relief to Rio Tinto which owns 66 percent of the project through its subsidiary, Turquoise Hill Resources. In November, it was reported that the terms of the agreement were in doubt after lawmakers approved plans to revise the agreement. At the time, Rio Tinto feared the government might try to completely renegotiate the agreements on the asset’s development to make it more beneficial for Mongolia which holds a 34 percent interest in the project.
“There is a lot of work to do to ensure Oyu Tolgoi reaches its full potential and we remain committed to exploring ways to deliver even greater benefits from Oyu Tolgoi to all shareholders.”
The Resolution, includes other additional clauses in relation to: exploring options to look at the Mongolian government’s equity share in Oyu Tolgoi; a redefinition of the reserve report and updated feasibility report; a renewal of the environmental and water assessments; and further capability development within the team which represents the Mongolian party.
The Resolution was officially published by the Government of Mongolia on Dec. 10, 2019. A copy of the Resolution is available at https://www.legalinfo.mn/law/details/14771?lawid=14771.