Ulaanbaatar, Mongolia – Rio Tinto, Ivanhoe Mines and the Government of Mongolia have signed an amended Shareholders Agreement that reflects the improved global economy and provides a solid foundation to secure project finance for the Oyu Tolgoi mine.
The amended Shareholders Agreement was signed by Minister of Finance S. Bayartsogt, Minister of Mineral Resources and Energy D. Zorigt, Minister of Nature, Environment and Tourism L. Gansukh, B. Enebish, General Director of Erdenes MGL LLC, Cameron McRae, President and CEO of Oyu Tolgoi LLC and Andrew Harding, Chief Executive of Copper Group, Rio Tinto LLC, John Fognani, Executive Vice President, Legal and General Counsel of Ivanhoe Mines Ltd, and Sam Riggall, Executive Vice President of Business Development of Ivanhoe Mines Ltd. during a ceremony at the Parliament Building.
The original terms of the Shareholders Agreement were negotiated in the midst of an unprecedented global economic crisis. Bank finance was unobtainable and the interest rate struck at that time was a reflection of the cost of raising capital.
The lowered interest rate in the amended Shareholders Agreement reflects the economic recovery since the first Agreement was signed.
Cameron McRae, Oyu Tolgoi CEO said: “In signing this amended Shareholders’ Agreement the Government of Mongolia, Ivanhoe Mines and Rio Tinto are reaffirming their joint commitment to building the Oyu Tolgoi mine on the firm foundation of the project agreements.
By demonstrating a rock solid commitment to the integrity of the Shareholders Agreement and the Investment Agreement, the Government of Mongolia is demonstrating to the international community that Mongolia is an attractive place to invest. It is critical now that the agreements are regarded as unchangeable. This will provide a stable investment environment and many more opportunities for the Mongolian economy to grow.”
Oyu Tolgoi is the largest economic project ever undertaken in Mongolia and the initial capital expenditure to construct the mine is approximately equal to Mongolia’s GDP for 2010.
Economic modelling conducted by the internationally renowned economist, Dr Brian Fisher shows that in 2017 the Oyu Tolgoi project will be responsible for a 35 per cent increase in the Mongolian economy above the level it would have reached without the mine.
The Mongolian economy is already showing signs of strengthening as a result of the investment in Oyu Tolgoi, with the construction, air travel and hospitality industries in particular all experiencing unprecedented growth.
About Oyu Tolgoi
Oyu Tolgoi is a three-way joint venture between Rio Tinto, Ivanhoe Mines and the Government of Mongolia. It will be one of the largest and highest-grade copper and gold mines in the world and is being constructed with an investment of over US$5 billion. The Government of Mongolia owns 34 per cent of Oyu Tolgoi and will receive a share of profits, taxes and royalties as part of its ownership stake.
Oyu Tolgoi is committed to contributing to a sustainable future for Mongolia. 90 per cent of the workforce will be Mongolian once the mine is in full production and Oyu Tolgoi is investing US$58 million (78 billion MNT) in training and education and an additional US$27 million (36 billion MNT) in the Workforce Employment Project designed to help address the general skills shortage in Mongolia.
Oyu Tolgoi’s key priorities are the health and safety of employees, best-practice environmental management, contributing to sustainable communities and always doing business with integrity, for the benefit of all the project’s shareholders and the people of Mongolia.
About Oyu Tolgoi LLC (www.ot.mn)
Oyu Tolgoi LLC, Mongolia's largest copper and gold mining company, is a strategic partnership between the Government of Mongolia, Turquoise Hill Resources and Rio Tinto. Located in the South Gobi, Oyu Tolgoi commenced shipment of product to customers in July 2013. Oyu Tolgoi is managed by Rio Tinto, which is investing global expertise and cutting-edge technology to help develop Mongolia’s mining industry and ensure Oyu Tolgoi is one of the world’s most advanced mines. For Oyu Tolgoi, nothing matters more than safety. The business operates under the principle that if a job cannot be done safely, it will not be done at all.