Rio Tinto’s Mongolian comfort zone is shaken – by Matthew Stevens (Australian Financial Review – April 9, 2018)

Confirmation that Mongolia’s anti-corruption authority has opened an “investigation” of the historic 2015 $US4.4 billion project financing deal for the Oyu Tolgoi copper mine has sucked Rio Tinto into the vortex of a controversy that started with a Swiss investigation into the contents of a bank account connected to a former Mongolian finance minister.

Ever since it became clear last month that Swiss authorities were taking serious interest in Bayartsogt Sangajav and how he came to fill a Swiss bank account with $US10 million back in September 2008, Rio has been able to take public comfort in the fact that whatever the circumstances were, they occurred at a time before the multinational miner had the capacity to influence negotiations between the government of Mongolia and Oyu Tolgoi’s Canadian-listed developer, Ivanhoe Mines.

At the time the claimed payment was made, Rio owned about 10 per cent of Ivanhoe. The Anglo-Australia stepped its way to control by 2012 and, to announce the changed circumstances, it changed Ivanhoe’s name to Turquoise Hill.

Confirmation on March 27 from Swiss authorities that neither Rio nor any of its employees was “currently” subject to the continuing corruption investigation appeared to endorse the security of Rio’s preferred comfort zone.

Because it now appears that Mongolia’s Independent Authority Against Corruption (IAAC) is attempting to link government approvals of a landmark 2015 Oyu Tolgoi refinancing deal with the Swiss investigation into the circumstances that delivered $US10 million to an account connected with Bayartsogt.

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