Union files complaint against Orla Mining, alleging violation of worker rights in Mexico
The complaint is only the second of its kind made from Canada using CUSMA’s RRM process since the trade deal came into force in 2020.
Shares in Rio Tinto-controlled Turquoise Hill Resources opened 3% lower on Friday after the Mongolian government reinstated a decade-old agreement ordering the Vancouver-based company to source power for its Oyu Tolgoi mine domestically.
Rio Tinto, down 1.8% in New York, could face higher costs on its $5.3 billion underground expansion of the giant copper-gold mine in the South Gobi desert near the border with China.
Last month Rio Tinto set up a 80-person office in Mongolia, independent from Oyu Tolgoi to strengthen ties with Ulaanbaatar
Mongolia gave Rio four years to build a local power plant which could come with a bill as high as $1 billion to serve the mine in the land-locked country to replace Chinese suppliers.
Rio said in a press release Friday “the cost and means of financing this will be finalized between shareholders”:
Rio Tinto will continue to review its capex forecasts for the project but has already earmarked $250 million a year for the development of a power station in Mongolia in its 2019 and 2020 capex forecasts.
The underground expansion would lift Oyu Tolgoi production from 125–150kt this year to 560kt at full tilt from 2025, making it the biggest new copper mine to come on stream in several years.
Last month Rio Tinto set up a 80-person office in Mongolia, independent from Oyu Tolgoi to strengthen ties with Ulaanbaatar and serve as a base for exploration in the vast mineral-rich nation of fewer than three million inhabitants.
Earlier January the government served the mine with a new bill for $155 million in back taxes which the company is disputing. Turquoise Hill also had to declare force majeure on deliveries after protests by Chinese coal haulers disrupted deliveries near the border.
Rio has come under pressure from shareholders about its alleged lack of transparency about pledges to the Mongolian government and escalating costs for the expansion, as well as its treatment of minority shareholders of 51%-owned Turquoise Hill.
Rio holds an effective one third of Oyu Tolgoi via its shareholding of Turquoise Hill and the Mongolian government 34%.
Copper was trading near its highs for 2018 on Friday jumping to $3.24 a pound or $7,140 a tonne. Copper averaged $2.80/lb ($6,192/t) over the course of last year.
3 Comments
Mike Failla
Freeport has nothing but trouble in indonesia and now rio has trouble in mongolia…..Its like a cancer and will only get worse.
Contrived Corridors
Nice photo of the Oyu Tolgoi office. I doubt many readers would know that the statue, which actually stands outside the National Library, is of Byambyn Rinchen, one of the founders of modern Mongolian literature, a literary translator, and a scholar in Mongolian studies (especially linguistics). (See Wikipedia article on Byambyn Rinchen).
marpy
Rio Tinto was always on the hook to build this power plant so no surprise there. They need to get serious on taking out the minority holders in TRQ. Some of the big minority holders like Sailingstone are getting tired of Rio Tinto’s antics and are beginning to make noise. They know what this deposit is worth and expect a proper bid. Their alternative is to start talking to some of Rio Tinto’s competitors who should be happy to gret a piece of this deposit.