Ulaanbaatar
B.Solongoo: The operations of Oyu Tolgoi company will be monitored
Economy
Ulaanbaatar
/MONTSAME/. B.Solongoo, Deputy Chief of the Cabinet Secretariat informed about
the progress of discussions being held between the Cabinet and the Rio Tinto Group
as well as the current situation.
During
the press conference that took place following the cabinet meeting, the Deputy
Chief of the Cabinet Secretariat said, “Oyu Tolgoi has had cost overruns two
times. We acknowledged the reasons behind the first cost overrun that occurred
at the open-pit section of the mine. However, the underground mining costs
increased by USD 1.45 billion. Following an independent review on this matter, we
were given a detailed report of 157 pages. In addition, a financial audit was
recommended in the report. In the future, we have to monitor the operations Oyu
Tolgoi. Furthermore, as the information provided by Oyu Tolgoi to Erdenes Oyu
Tolgoi is very general, we have requested the company to provide more detailed
information."
“The dispute over the two tax acts will also continue at the London Court of International Arbitration. As the dispute was initiated by Oyu Tolgoi, it will not be resolved even if Rio Tinto pays USD 350 million. Alongside the current pandemic circumstance, the schedule delays of the underground mine exploitation negatively affected the state budget. Rio Tinto, therefore, has offered to pay dividends to be paid to our side in advance. We did not hold any talks on suspending the development of the underground mine because the exploitation of the underground mine is mutually beneficial. Rio Tinto Group has sent us a report stating that the government owes USD 22 billion. As the report was quite concerning, we suggested discussing the matter with the group in order to resolve misunderstandings. We have not yet decided what to do with the share of 34 percent owned by Erdenes Oyu Tolgoi LLC on behalf of the Government of Mongolia,” she said.
