Rio’s Mongolian plans remain on the outer after PM’s ouster

NEGOTIATIONS to press ahead with Rio Tinto’s planned $US5 billion ($5.8bn) expansion of the Oyu Tolgoi copper and goldmine in Mongolia look set to remain in limbo, with the Mongolian parliament kicking out the Prime Minister and widespread management and board changes at the project.
Two days after Mongolian legislators voted their Prime Minister out, Rio subsidiary Turquoise Hill announced its chairman and chief executive would retire at the end of the year, after less than three years each in the job.
And Rio’s Oyu Tolgoi chief executive Craig Kinnell returned to Britain last month for family reasons.
Vancouver-based Turquoise Hill, which Rio owns 51 per cent of, said chairman David Klingner and chief executive Kay Priesly, both former Rio employees, would step down at the start of January and December respectively.
Rio copper development vice president (and Turquoise Hill board member) Jeffrey Tygesen will be appointed chief executive and fellow director Jill Gardiner, a former RBC Canada regional head who has never worked for Rio, will become chairman.
Andrew Woodley, who was running the ill-fated Mozambique coal operation Rio sold for $US50m after buying for $4bn, will become Oyu Tolgoi chief this month. Under Ms Priestly and Mr Klingner, Turquoise Hill brought Oyu Tolgoi into production but oversaw a period of tensions with the government that has seen the valuable underground expansion of the project stalled so far for 16 months.
“The appointments were the result of an extensive succession planning program that has been under way for several months,” Turquoise Hill said.
Dr Klingner said he was pleased with the company’s development under Ms Priestly.
“Under her leadership, the company emerged debt free in January 2014 following a successful rights offering, significantly reduced corporate costs ... and divested multiple non-core assets,” he said. Rio Tinto and Mongolia, which owns 34 per cent of Oyu Tolgoi, have been unable to negotiate a fiscal framework and settle other disagreements over the expansion, which will realise most of the value in the project.
This week’s 36 to 30 vote dismissal of Prime Minister Norov Altankhuyag amid reported allegations of financial mismanagement, including slumping foreign investment, corruption and nepotism, does little for confidence that a deal on Oyu Tolgoi is close.
Rio would not comment on the political turmoil..



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