Rio Tinto Resolves copper mine Tax Row with Mongolia ULAN BATOR — Rio Tinto and Mongolia have made a breakthrough in a tax dispute that has stalled development of the $6.5bn Oyu Tolgoi copper mine.
Disputes over costs and taxes have delayed an expansion of the mine that would extend its life beyond an estimated 15 years.
"Misunderstandings and issues surrounding the tax climates have been resolved," an official familiar with the government’s position has said.
The terms of the agreement or what other issues needed to be resolved were not specified.
Last year, Rio handed Mongolia a proposed memorandum of understanding that would provide consent to move forward with the project.
First, however, Rio and the government need to find consensus on issues including a $127m tax claim against the company, that was later reduced to $30m, and approval of a $4bn project financing package.
Mongolia has been concerned about costs because it cannot receive dividends for its 34% stake in the mine until after investors first recoup their investment.
Construction on the underground complex is currently projected to cost $5.4bn.