Rio Tinto's (ASX: RIO) negotiations with the Mongolian government surrounding its huge Oyu Tolgoi copper and gold mine have reached the halfway mark. Under the JV agreement, Rio Tinto (through a majority holding in Canadian-based Turquoise Hill Recourses) owns 66% of Oyu Tolgoi and the government holds the remaining 34%.
On Tuesday, the Mongolian government said it had spoken with the mining operator and major owner about 15 of the 30 urgent issues that led to a suspension of the projects $5.1 billion expansion.
The board meeting, held in London, discussed issues surrounding the Oyu Tolgoi licences which were owned by third parties. Two licenses at the project were held by Canadian-listed Entree Gold but will be transferred to the government, along with an additional $1.4 billion over the duration of the project.
On Monday, the two parties will meet and discuss how they will handle cost overruns, conduct a review for funding the project and submit expansion plans. Oyu Tolgoi is one of the world's biggest copper and gold projects and will produce around 450,000 metric tonnes and 330,000 ounces of each respectively – equating to around one third of Mongolia's GDP.
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Motley Fool contributor Owen Raskiewicz does not have a financial interest in any of the mentioned companies.
