Rio Tinto: Willing To Talk To Mongolia Government About Oyu Tolgoi Pact

Diversified miner Rio Tinto PLC (RIO) will respond to any request from the Mongolian government to discuss the investment agreement for the massive Oyu Tolgoi gold and copper project but doesn't expect the 2009 pact to be altered.

Cameron McRae, Rio Tinto's Mongolia country manager and chief executive of Oyu Tolgoi, said Sunday in an emailed statement from a Rio Tinto spokesman that the company hasn't received formal notification from the Mongolian government that the government is seeking to modify the investment agreement.

"We respect the Mongolian government and when they give us the notification to come and talk we will have those talks," he said.

"I think what we are demonstrating is that the investment agreement is a contract, and we're going to honor our commitments and we expect the government to honor its commitments," he added.

The comments were made on the same day that Rio Tinto, the operator and an indirect shareholder of the company, commemorated the halfway mark in constructing the Oyu Tolgoi project. Mongolia's Minister of Mineral Resources and Energy also attended the event.

The government is seeking to raise its stake in the project from a current level of 34% to 50% and is seeking additional payment for using reserves, Mongolian investment bank Frontier Securities said in a note to clients, citing the government's official website and local media reports.

Rio Tinto is an indirect shareholder in Oyu Tolgoi through a 48.5% equity stake in Canada-based Ivanhoe Mines Ltd (IVN.T). Ivanhoe owns a 66% stake in the Oyu Tolgoi project.

-By Alex MacDonald, Dow Jones Newswires; +44 (0)20 7842 9328; alex.macdonald@dowjones.com

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