Mongolian government representatives to continue talks with Rio Tinto in Ulaanbaatar; much remains uncertain for the international investors

By Shagai, MonInfo news service 

Otgochuluu Chuluuntseren, newly appointed Mongolian Board member of Oyu Tolgoi LLC

Otgochuluun Chuluuntseren, newly appointed Mongolian board member of Oyu Tolgoi LLC, the joint venture between Mongolian government and Rio Tinto and  Director General of Department of Strategic Policy and Planning of Mongolian Ministry of Mining said " next round of talks with Rio Tinto will continue in Ulaanbaatar from Oct 7, 2013". 

During a press conference held this morning, Otgochuluu said Mongolian government is very well aware of volatility of mining commodity market and intends to mine as much copper and gold from Oyu Tolgoi before next price plunge in the world market. 

Mongolian government decided to set up 3 working groups to study the project financing proposal of Rio Tinto to fund construction of underground mine of Oyu Tolgoi and updating the current feasibility study of the mine. 

Three newly appointed Mongolian board members of  Oyu Tolgoi including  Ganbold Davaadorj, CEO of Erdenes Oyu Tolgoi, state-owned company and Temuulen Ganzorig, deputy director of Erdenes MGL LLC, state-owned mining company and Otgochuluu visited London headquarters of Rio Tinto to hold talks with Rio Tinto officials.

Investment community was expecting much positive news from the London talks. As the stand-off between Rio Tinto and the Mongolian government continued, the Asian country's FDI fell by 41 percent and Rio Tinto announced a halt to the development of an underground mine estimated to hold 80 percent of Oyu Tolgoi's value. Rio Tinto investment accounted much of the FDI in Mongolia. 

Otgochuluun said Mongolian government will review the project financing proposal of the Rio TInto carefully and said he hopes underground mining financing issue will be decided by Dec of this year. 

Facing with deteriorating economic condition and shortage of hard currency, the Mongolian government is pushing Rio Tinto to resume the underground mine development and continue its investment in the country.

Rio Tinto has tried to get approval from the Mongolian government for its project financing proposal to fund development of the underground mine since last winter. However, the government did not respond and its position remained unclear.

According to the proposal, Rio Tinto was to get 4 billion USD financing from a dozen of the world's leading banks, such as International Finance Corporation, a private financing arm of World Bank, European Bank for Reconstruction and Development, BNP Paribas, the U.S. Export-Import bank, Export Development Bank of Canada,and Standard Chartered Bank.

Source:MonInfo News  Service