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Mongolia seeks more tax revenue from Rio copper mine expansion -source www.finance.yahoo.com
TORONTO, Feb 8 (Reuters) - Mongolia wants more tax revenueunder a revised deal to expand Rio Tinto's OyuTolgoi copper-gold mine rather than a larger ownership stake inthe project, a person with direct knowledge of the government'sthinking told Reuters on Monday, as the two sides bid to resolvea long-running standoff over the development.
On Sunday, the Financial Times reported Ulaanbaatar isseeking agreement with Rio to terminate a deal to expand themine and replace it with a new pact that offers better terms.
“We obviously would like to have more tax revenues," theperson said, declining to be identified owing to the sensitivityof the issue.
The mine is one of the world's largest-known copper and golddeposits. The government holds a 34% stake in the $6.75 billionproject, while Rio Tinto-controlled Turquoise Hill ownsthe rest.
Ulaanbaatar has previously told Rio it was concerned thatthe economic benefits of developing the mine have been erodeddue to the significant increase in costs.
Under current plans, Ulaanbaatar won't receive dividendsuntil 2051 while Oyu Tolgoi won't pay "meaningful" corporateincome tax, the person said. "That's really concerning."
Rio did not immediately return a request for comment.
The miner on its website says Oyu Tolgoi has paid thegovernment more than $2.7 billion in taxes, fees and otherpayments since 2010.
The source said government representatives met last weekwith Bold Baatar, a Mongolian national whose recent appointmentas head of Rio's copper operations is widely seen as an attemptto improve government relations and make progress in talks onthe project.
Baatar has vowed to discuss the plans with the newgovernment and work towards a resolution.
The underground expansion will push annual production tonearly 500,000 tonnes per year, making it among the world’sbiggest copper mines.(Reporting by Jeff Lewis; Editing by Mark Potter and ChizuNomiyama)
Published Date:2021-02-09
