UPDATE 3-Mongolia tells Rio Tinto to delay Oyu Tolgoi copper exports (Reuters India – June 21, 2013)


ULAN BATOR, June 21 (Reuters) – Rio Tinto said its plan to start exporting copper from the $6.2 billion Oyu Tolgoi mine on Friday has been delayed at the request of the Mongolian government, heightening investor concerns about the risks of mining in the country.

Uncertainty over what was behind the delay sparked an exodus out of shares in other Mongolian miners on Friday, with Canadian and Australian listed miners exposed to the country sliding between 10 and 20 percent.

Journalists had been invited last week to attend a ceremony at the copper and gold mine on June 14 to mark the first exports. That was postponed to June 21, but the event was again cancelled at the last minute. Mongolia is due to hold a presidential election on June 26.

“Oyu Tolgoi is ready to start its first shipments of copper concentrate from its Mongolian mine and all necessary permits to do so have been received from relevant authorities,” Rio Tinto spokesman Bruce Tobin said on Friday.

“However, plans to start shipping on Friday 21 June have been postponed at the request of the government of Mongolia.” The company declined to comment on what was behind the latest delay.

The event on June 14 had been postponed due to a demand from the government that Rio Tinto keep all export revenue in Mongolia, Prime Minister Norov Altankhuyag said earlier this week.

That issue has been resolved, people familiar with the situation said. The agreement that governs the Oyu Tolgoi project gives Rio Tinto the freedom to put the export revenue anywhere it wants, they added.

The government earlier this year briefly froze the accounts of Rio Tinto and Canada’s SouthGobi Resources, making investors nervous about their ability to repatriate earnings.

Rio, operator of the mine, has been producing at Oyu Tolgoi for several months, and has been aiming to start exports by the end of June.

“Rio Tinto is keen to start shipping as soon as possible in order for the benefits from Oyu Tolgoi to start flowing to all parties, including the people of Mongolia,” Tobin said.

“Shipping will commence as soon as the government indicates its support for us to do so.”

For the rest of this article, click here: http://in.reuters.com/article/2013/06/21/riotinto-oyutolgoi-idINL3N0EW1BV20130621


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