Turquoise Hill, in which Rio has a 50.8% stake, owns 66% of Oyu Tolgoi. The rest is held by the Mongolian government.
Move follows an independent report that rejected Rio’s explanation for the project’s delays and cost overruns.
The move comes after relations between the companies and the government hit a fresh impasse earlier this month, following an independent report that rejected Rio’s explanation for the project’s delays and cost overruns.
A definitive estimate for the development of the new mine level, announced in December, pegged the cost of Oyu Tolgoi’s underground section at $6.75 billion, about $1.4 billion higher than its original estimate, in 2015.
First production, initially expected in late 2020, was rescheduled for October 2022, and Rio blamed unfavourable geology conditions as the main cause for the cost and timeline review.
The independent report published earlier this month suggested it was rather caused by the miner’s mismanagement.
Financial regulators in the UK and US are also examining Rio’s disclosures about the delays.
Internal conflicts
Rio and Turquoise Hill Resources spent the first months of the year in a standoff over the funding to expand the mine. The spat forced the Canadian miner’s CEO to quit, not before taking Rio to arbitration.
The firms finally reached an agreement in April, which addressed the remaining $2.3 billion needed for the underground project and replaces deals set up under a memorandum of understanding inked in September last year.
Oyu Tolgoi is Rio Tinto’s main copper growth project. Once completed, the mine’s underground section will lift production from 125,000–150,000 tonnes in 2019 to 560,000 tonnes at peak output, which is now expected by 2025 at the earliest. This would make it the biggest new copper mine to come on stream in several years.
