13th Dec 2021 09:34
(Alliance News) - Rio Tinto PLC has agreed to write off a loan worth USD2.3 billion that was made to Mongolia to cover the government's share of the development costs for the giant Oyu Tolgoi copper mine, the Financial Times reported on Monday.
The debt write-off is part of a wider deal to end tensions between the London-based mine and the Mongolian government over the project, FT said, which has been marred by delays and cost overruns.
Rio has offered to end the underground development plan, accept an independent audit of the mine's financing, and make an extra investment, the newspaper reported. This should allow the next phase of development to begin in January.
The deal needs to be ratified by the Mongolian parliament.
https://www.ft.com/content/e1013a08-42e4-49e0-8002-14f2891d4325
In July 2019, Rio Tinto announced delays of 16 to 30 months and additional costs of USD1.2 billion to USD1.9 billion at Oyu Tolgoi.
The company said the delay was due to difficult ground conditions, which required a re-examination of the project's design and schedule.
In July this year, Rio said first production at the mine is expected by October 2022.
Rio Tinto shares were up 1.7% at 4,836.00 pence early Monday in London.
By Greg Roxburgh; [email protected]
Copyright 2021 Alliance News Limited. All Rights Reserved.year
Related Shares:
Rio Tinto