Rio Tinto is set to seal a project finance deal of at least $4bn to expand one of the world’s largest copper mines in spite of a commodities downturn that has sent the price of the metal to multiyear lows.
The miner’s agreement with banks to provide funds for the Oyu Tolgoi project in Mongolia is expected to be announced this week in Ulan Bator, the capital.
It follows years of delays amid disputes between Rio and Mongolia’s government over how to share costs and profits from the project.
After Rio and Mongolia resolved their differences this year, the project finance deal with lenders is one of the last steps remaining before Rio’s board is expected to to press ahead with expansion of the mine. That approval is now expected in 2016.
Rio has always said expansion is vital to gain full economic benefit from a project it started in 2006 as part of an investment worth more than $6bn. That sum was only for the first open-pit phase at Oyu Tolgoi.
Expansion would cost a further $5bn and would move the mine, close to the Chinese border, into a bigger underground phase.
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