Copper concentrate shipments from Rio Tinto’s (ASX: RIO) Oyu Tolgoi mine resumed on Thursday, a day after protesters blocked a key transport route and threatened exports from one of the world’s largest copper projects.
The company did not indicate whether it had reached an agreement with protesters, who have been demanding a larger share of mining revenues for Mongolians.
“The Oyu Tolgoi mine generates an average of 23 billion tugriks [Mongolian currency] into the economy every day,” the company said. “Through its direct and indirect contributions, it accounts for more than 10% of Mongolia’s economy.” Oyu Tolgoi also noted that “one in three tugriks circulating in the Mongolian economy comes from the mining sector.”
Key mine
The brief disruption highlighted the political sensitivities surrounding Oyu Tolgoi despite its importance to the country.
Mongolia’s government, which owns 34% of the project through state-owned Erdenes Mongol LLC., has been pressing for a greater share of economic benefits from the mine. Earlier this year, Ulaanbaatar sought to reopen negotiations over the project’s commercial terms and has argued that dividend payments should be accelerated.
Relations between Rio Tinto and Mongolia have fluctuated in recent years. In 2022, the miner waived $2.4 billion in debt owed by the government to reset the partnership and advance underground development. More recently, Mongolia launched legal action over alleged tax underpayments and renewed pressure for changes to the project’s financial structure.
Oyu Tolgoi is one of the world’s largest known copper-gold deposits and a cornerstone of Rio Tinto’s strategy to expand copper production as demand rises from electrification and renewable energy projects.
Rio owns 66% of the operation and expects it to become the world’s fourth-largest copper mine by 2030 as underground production ramps up.
