Rio Tinto Commits to Mongolia, to Open New Office in Ulaanbaatar
January 21 2018 - 5:34PM
Dow Jones News
By Robb M. Stewart
MELBOURNE, Australia--Rio Tinto PLC (RIO) plans to open an
office in Mongolia's capital and increase its workforce there, even
as its Oyu Tolgoi copper and gold project has been hit with a new
tax bill and has been blocked by protests from delivering to
China.
The new office in Ulaanbaatar will be separate from Oyu Tolgoi,
and will support the miner's exploration program and a technology
center. Rio Tinto said it would increase its national employee
numbers to about 80 through the course of 2018.
"Mongolia is one of Rio Tinto's most strategically important
markets and we are here to stay," Jean-Sebastien Jacques, Rio
Tinto's chief executive, said Monday. "Today we are demonstrating
the deepening of our commitment to Mongolia."
Rio Tinto has invested more than US$7 billion in the country
since 2010 and US$1.5 billion in taxes, royalties and other
payments to the government, Mr. Jacques said.
Turquoise Hill Resources (TRQ.T), a Canadian mining company that
owns 66% of Oyu Tolgoi and which is 51% owned by Rio Tinto, last
week said it had received a tax assessment in Mongolia for about
US$155 million following an audit of taxes paid by Oyu Tolgoi
between 2013 and 2015. It said it firmly believed the Oyu Tolgoi
venture, which is 34% owned by Mongolia's government, had paid all
required taxes and charges.
Days later, Turquoise Hill said protesters had used vehicles to
block the main access road on the Chinese-Mongolian border, which
was preventing Oyu Tolgoi convoys from delivering concentrates to
customers. The mine continued to operate and no impact on product
was expected, it said.
After two years of tense negotiations, Rio Tinto in 2015 struck
a deal with the Mongolian government that cleared the way for a
US$5.4 billion expansion of Oyu Tolgoi. The deal with the
government settled disagreements around tax and royalty payments
that had held up the underground expansion of the deposit.
Rio Tinto said it had appointed Munkhtushig Dul as its Mongolia
country director and to lead its new office. He will coordinate
with the Oyu Tolgoi team, led by managing director Armando Torres,
it added.
Write to Robb M. Stewart at robb.stewart@wsj.com
(END) Dow Jones Newswires
January 21, 2018 17:19 ET (22:19 GMT)
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