Zijin Mining to take 9.9% stake in Montage Gold
As part of the deal, the Lundin Family Trust also agreed increase its stake in the company from 17.7% to 19.9%.
While copper shipments have now started, the long-running dispute between the Mongolian government and Rio Tinto (LON:RIO) over the massive Oyu Tolgoi copper-gold mine continues to drag on.
Mongolia owns 34% of Oyu Tolgoi located in the South Gobi desert and Reuters reports Tserenbat Sedvanchig, executive director of Erdenes Oyu Tolgoi, said the government still has “22 points of dispute.”
The government of the Asian nation has been at loggerheads with operator Turquoise Hill Resources (TSX:TRQ), which is controlled by Rio and the owner the remainder of the mine, for months.
The Asian nation twice held up shipments from the $6.6 billion mine which is set to contribute as much as a third of the nation’s economy as it ramps up to full capacity.
Sedvanchig said the investment agreement signed in October 2009 and capital expenditure were some of the biggest issues:
“If we don’t make clear what was the amount of initial investment, resolution of some of the other 21 issues will be hindered,” Sedvanchig told Mongolian online news service News.mn in an interview released on Tuesday.
Other sticking points included cost overruns, the funding and feasibility study for a $5 billion phase 2 underground expansion, the employment and pay of Mongolian workers, contractors and corporate governance, taxation and the repatriation of earnings.
Mongolia has long coveted a bigger slice of the mine and has twice in the past couple of years floated proposals to take majority control.
Vancouver-based Turquoise Hill said yesterday Oyu Tolgoi will produce 75,000 to 80,000 tonnes of copper in concentrate this year.
At full tilt, the mine is set to produce more than 1.2 billion pounds of copper worth over $4 billion at today’s prices, 650,000 ounces of gold ($800 million) and 3 million ounces of silver (under $100 million) each year.
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