Rio Tinto has delayed an event to mark first exports from the $6.2 billion Oyu Tolgoi mine as it awaits final clearance from the government, according to a report from Reuters. Media, traders and government officials had been invited to a ceremony on Friday, June 14 at the site in the South Gobi Desert to witness the first exports from the copper and gold mine to China, but were informed late on Wednesday that the trip was off.
Oyu Tolgoi LLC says that nothing has changed from previous statements that it is expecting first exports before the end of June. Start-up of the mine, the biggest in the country, is being closely watched by other companies and investors in Mongolia, who have been rattled over the past year by new regulations and concerns raised by the government over Oyu Tolgoi.
The opening of the Oyu Tolgoi project is vital for Mongolia as it is expected to make up a third of the country’s economy by 2020. It is also a crucial source of growth for operator Rio Tinto as it aims to ease its dependence on iron ore and cast off small or unprofitable assets.
Rio plans to expand the mine underground, with a final decision expected next year. The expansion hinges on finalizing around $4 billion in project financing, also expected soon.
Rio Tinto’s majority-owned Turquoise Hill Resources owns 66% of the project, while the Mongolian government owns the remainder.
Mongolia’s Prime Minister Norov Altankhuyag had planned to attend the event at the mine, a government spokesman said earlier in the week. A spokesperson for President Taskhia Elbegdorj had said it was unlikely he could attend because of activities related to his re-election campaign. Elbegdorj, who is seen as more supportive of foreign investment than opposition candidates, is expected to win the poll, scheduled for June 26.
“We’re hopeful come the second half of the year people will become a bit more positive on Mongolia,” says Kincora Copper chief executive Sam Spring. Kincora is a copper explorer with a project near Oyu Tolgoi.
“Hopefully, Oyu Tolgoi ramping up and the completion of the project financing helps, as does the presidential election,” he adds.