Rio Tinto Group will cancel US$2.3 billion in debt owed by Mongolia as the miner seeks to push forward with expanding the giant Oyu Tolgoi copper project that’s been beset by years of disputes, delays and cost blowouts.
Rio’s Chief Executive Officer Jakob Stausholm proposed improved terms for a 2015 financing agreement that underpins the mine’s underground expansion, according to a Dec. 13 letter to Prime Minister Oyun-Erdene Luvsannamsrai posted on Mongolia’s government website.
Writing off the debt would speed up the timeline for when the country can start to receive dividends, it said.
Oyu Tolgoi is one of the largest known copper and gold deposits in the world. The Mongolian government has 34 per cent ownership, with the rest held by Turquoise Hill Resources Ltd., which is 51 per cent owned by Rio. The mine is Rio’s flagship growth project, but has increasingly become a headache.
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