Rio Tinto Settles Tax Dispute with Mongolia; Oyu Tolgoi Mine Back On Track
UK mining giant Rio Tinto (LON:RIO) is on the verge of getting its $6.5 billion Oyu Tolgoi project back on track after resolving a lingering tax dispute with the Mongolian government.
The mine, which is expected to become one of the largest copper-gold resources in the world, was temporarily side tracked after the government threatened to delay the project over ongoing tax issues.
Mongolia’s vice-minister of mining, Oyun Erdenebulgan confirmed to reporters the government would settle for a $30 million payment from Rio, which is much less than the $130 million the Mongolian government originally said was owed.
"I understand both parties are now working closely and effectively and nobody wants to delay because of this tax issue," Erdenebulgan said.
The first stage of the copper and gold mine is already in operation, but the second stage is where the majority of the value lies. Once construction is fully completed, the Oyu Tolgoi mine will produce more than 300,000 tons of copper concentrate a year.
According to Oyun, all remaining disputes between Rio Tinto and the government regarding the project are now settled, and both sides are waiting for the completion of the new feasibility study.
"When it has been received, we will appoint a committee to approve it," he said.
The timing of the tax resolution is right in line with a September 30 deadline that lenders have set for Rio Tinto and Mongolia to settle their differences. Banks have already pledged more than $4 billion towards development of the second stage of Oyu Tolgoi.
Newmont acquires Canada’s GT Gold in $325mn deal
Newmont, the world’s biggest gold miner, has acquired Canada’s GT Gold in a deal worth $325mn. The gold giant now controls the Tatogga gold-copper project in the Traditional Territory of the Tahltan Nation.
“With the acquisition of GT Gold and the Tatogga project in the highly sought-after Golden Triangle district of British Columbia, Canada, Newmont continues to strengthen our world-class portfolio,” commented Newmont President and CEO Tom Palmer.
“We look forward to continuing to build a respectful and meaningful relationship with the Tahltan Nation, including the community of Iskut. The relationships we have with Indigenous communities, First Nations and host communities are critical to the way we operate. We will partner with the Tahltan Nation at all levels, and with the Government of British Columbia to ensure a shared path forward as the Company understands and acknowledges that Tahltan consent is necessary for advancing the Tatogga project.”
Newmont’s acquisition includes the Tatogga project, comprised primarily of the Saddle North deposit, which has the potential to contribute future significant gold and copper annual production. There are also further exploration opportunities beyond the known deposits at Saddle North within the land package. The Tatogga project adds to Newmont’s existing interest in the prospective Golden Triangle through the company’s 50% ownership in the Galore Creek project.
Newmont is the world’s leading gold company and a producer of copper, silver, zinc and lead. A world-class portfolio of assets, prospects and talent is anchored in favourable mining jurisdictions in North America, South America, Australia and Africa. The American miner is celebrating its 100th anniversary this month.
With gold prices on the rise, the last six months has seen gold industry M&A activity accelerating. A recent Mckinsey report, advises that the industry need to be mindful of mistakes made during the previous gold price boom, when growth was chased unidirectionally by several companies.