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RIO - Rio Tinto News Story

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Sector
Basic Materials
Size
Large Cap
Market Cap £102.06bn
Enterprise Value £105.94bn
Revenue £31.75bn
Position in Universe 13th / 1827

UPDATE 1-Rio Tinto willing to negotiate new Mongolia mine agreement -sources

Thu 18th February, 2021 8:19pm
(Adds background, detail)
    By Jeff Lewis
    TORONTO, Feb 18 (Reuters) - Global miner Rio Tinto
 RIO.AX  RIO.L  is willing to enter a new agreement with
Mongolia to expand its Oyu Tolgoi mine as the government
requested, two sources with direct knowledge told Reuters on
Thursday, as both parties look to resolve an impasse over the
multibillion-dollar project.
    Mongolia had sought agreement with Rio to cancel the deal
underpinning the mine's underground expansion, saying rising
costs and project delays had eroded expected benefits.
 urn:newsml:reuters.com:*:nL1N2KE05R
    Oyu Tolgoi is one of the world's largest-known copper and
gold deposits, located in the South Gobi region of Mongolia. 
    The Mongolian government holds a 34% stake in the mine and
Rio's majority-owned Turquoise Hill Resources  TRQ.TO  holds the
rest. 
    Investment terms for the underground expansion were agreed
in a 2015 deal known as the Dubai Agreement. Mongolia argues
that agreement lacks legitimacy because it was not approved by
the country's parliament, among other issues. The government
also wants more tax revenues from the project.  urn:newsml:reuters.com:*:nL1N2KE22P  
    Rio is open to replacing the underground development
agreement with a new deal ratified by parliament, one of the
sources said. Discussions could include fees Rio gets for
managing the project and interest rates on partner loans, the
source said.
    Rio declined to comment. Sources declined to be identified
due to the sensitivity of negotiations. 
    Rio Chief Executive Jakob Stausholm told investors on
Wednesday he was convinced the miner would resolve the standoff.
 urn:newsml:reuters.com:*:nL4N2KN1BA
    Costs for the expansion have ballooned to $6.75 billion,
about $1.4 billion higher than Rio's estimate in 2016.
    First production is expected in late 2022 and will push
annual output to nearly 500,000 tonnes over time, making Oyu
Tolgoi among the world’s biggest copper mines. 

 (Reporting by Jeff Lewis
Editing by Cynthia Osterman and Jonathan Oatis)
 ((Jeff.Lewis@thomsonreuters.com; +1 647 200 7236))
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