Mongolia has announced that recent changes to the shareholders’ agreement with Rio Tinto regarding the Oyu Tolgoi Copper-Gold Project are expected to significantly enhance its financial returns, projecting an increase of approximately ₮13 trillion (around $5.07 billion). Prime Minister Nyam-Osoryn Uchral detailed these changes, which include reductions in management fees and lower interest rates on shareholder loans, as reported by MNB World, the international service of Mongolia’s national public broadcaster.
The Mongolian government estimates that total project cost savings could reach around ₮30 trillion. This figure is composed of approximately ₮8 trillion saved from lower management fees and the elimination of overlapping costs, alongside ₮22 trillion from reduced interest on loans. These adjustments are part of a broader strategy to enhance the financial viability of the Oyu Tolgoi project, which is crucial for Mongolia’s economy.
In a significant development, the parties have agreed to initiate dividend distributions starting in 2027, with ongoing discussions to finalise the arrangements. This update follows Rio Tinto’s announcement in June, which confirmed an agreement to adjust the interest rate on shareholder loans. Additionally, it referenced a preliminary agreement on management fees reached in May, as well as a commitment to expedite shareholder distributions.
Rio Tinto currently holds a 66% stake in Oyu Tolgoi, while the Mongolian government owns the remaining 34% through the state-owned enterprise Erdenes Oyu Tolgoi. The underground expansion of the mine is progressing, with Rio Tinto aiming for an average copper production of approximately 500,000 tonnes annually from 2028 to 2036 across the entire project. Oyu Tolgoi is a pivotal copper and gold mining operation located in Mongolia’s South Gobi region, and these developments signal a positive trajectory for both the project and the country’s mining sector.
