Oyu Tolgoi is restating details about the Oyu Tolgoi Investment Agreement today to give Mongolians a better understanding of the terms and reassure them of the benefits it will deliver to the country.
Oyu Tolgoi wants to clearly explain the Investment Agreement so that there is no doubt about the fairness and transparency of the deal with the Government of Mongolia.
Oyu Tolgoi is spelling out the facts to clearly explain the key aspects and underline the transparency of the Investment Agreement. The main points of the landmark Investment Agreement are:
Oyu Tolgoi is one of the world’s greatest copper-gold ore bodies and could support mining for more than 60 years based on mineral resources identified by current studies;
- Rio Tinto and Ivanhoe Mines will have invested US $4.5 billion into the Oyu Tolgoi project by the end of 2011, including more than US $1 billion on exploration and evaluation before the Investment Agreement was finalised;
- The Oyu Tolgoi Investment Agreement was signed by the Government of Mongolia, Rio Tinto and Ivanhoe Mines on 6 October 2009 and negotiated in accordance with Mongolia’s Minerals law;
- Under the Investment Agreement, the Government of Mongolia acquired a 34 per cent interest in the Oyu Tolgoi project, which cannot under any circumstances be reduced. It also has an option to increase its share to 50 per cent;
- The Government of Mongolia will receive the majority of the economic benefits generated by the Oyu Tolgoi project through taxes, royalties and dividends;
- The Government of Mongolia has not and will not be required to contribute any cash from its own resources to fund the development costs of the project. Ivanhoe and Rio Tinto will provide the finance needed for Mongolia’s share of the project’s capital expenditure;
- Oyu Tolgoi will create thousands of jobs and business opportunities for Mongolians. Oyu Tolgoi is one of the biggest private sector employers in Mongolia with more than 8,000 employees and a wide range of job and training opportunities;
- Hiring and training Mongolians is a priority. As set out in the Investment Agreement, during the life of the mine nine out of 10 workers will be Mongolian;
- Many Mongolian businesses are supplying goods and services to the Oyu Tolgoi project;
- The mine will significantly contribute to the economic development of the South Gobi region through infrastructure, including roads, power, water and air links.
Cameron McRae, President of Oyu Tolgoi LLC said: “The development of the Oyu Tolgoi project has only been made possible by the significant financial commitment of shareholders after the resource was discovered by Ivanhoe Mines. Rio Tinto and Ivanhoe have invested heavily to get the project to where it is today. We will continue to spend billions of dollars to get the mine into production and operating at world-class standards.
“The Government of Mongolia and its citizens will receive significant economic and social benefits from Oyu Tolgoi. Extensive independent analysis of the Oyu Tolgoi Investment Agreement by international financial institutions and academics confirms that it represents global best practice.
“The benefits for Mongolia arising from Oyu Tolgoi are built on the bedrock of the Investment Agreement, which provides a firm foundation for the development of the Mongolian economy over many decades.
“It is crucial that the Investment Agreement is supported by the Government to provide confidence for investors and deliver the certainty required for investment in the project. It also sends an important message to international investors that Mongolia is open for business.
“A steadfast commitment to honouring legal agreements and contracts, fairly negotiated in good faith, will place Mongolia in a strong position to raise finance for large-scale projects. The benefits from these projects in turn will provide essential funding for government programmes, building national infrastructure and improving the quality of life for all Mongolians.”
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.