Former ExxonMobil, Shell and Total executive Daniel Worrall has been appointed as the mining company's chief executive and country director for Mongolia, which hosts the company's most important growth asset, the Oyu Tolgoi copper, gold and silver mine.
Mr Worrall's appointment fills a vacuum that has existed for almost a year since Mongolian national Munkhtushig Dul stepped down as the company's top representative in the nation.
Mr Worrall has spent the past decade with Exxon, and between 2014 and 2017 was part of the oil giant's government relations team in Papua New Guinea overseeing the start of the massive PNG LNG gas project.
Prior to that he was responsible for government and stakeholder relations across Kazakhstan, Turkmenistan and Azerbaijan for Royal Dutch Shell and Total.
That experience in jurisdictions prone to "resource nationalism" will come in handy in Mongolia, where politicians regularly talk up their desire for taxpayers to have a greater share of wealth from Oyu Tolgoi.
Oyu Tolgoi is Mongolia's biggest employer, economic bellwether and a crucial test case for major foreign direct investment into the country.
Not surprisingly the mine is always politically contentious, and Mr Worrall joins Rio just months before parliamentary elections in mid-2020.
2019 was a testing year for Rio's relationship with the Mongolian government, meaning the lack of a dedicated country leader was far from ideal.
Rio announced massive cost and schedule blowouts on the underground expansion of Oyu Tolgoi in July, and those blowouts negatively affect the timing and size of dividends the Mongolian government will receive from the mine.
Rio also had to deal with a Mongolian administrative court making a non-binding ruling that a crucial 2015 investment agreement was not valid.
The Mongolian Parliament also spent much of 2019 working on suggested reforms to Rio's Oyu Tolgoi investment agreements, and by December the Mongolian government had signalled it may be willing to exchange its 34 per cent equity stake in the mine for higher royalty rates.
The Mongolian government has also placed a 12-month moratorium on the issuance of new mineral exploration licences, in a blow for those trying to discover the next generation of copper and gold deposits.
Rio's exposure to Oyu Tolgoi comes through its 50.79 per cent stake in Canadian company Turquoise Hill Resources.
Turquoise Hill owns 66 per cent of the Mongolian company that owns the mine.
Source:https://www.afr.com/
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