Rio awaits Oyu Tolgoi Mongolia agreement

Rio Tinto Ltd says further development of the Oyu Tolgoi joint venture in Mongolia needs to be carefully planned amid the economic downturn, as the company awaits an investment agreement from the government. Development of the large copper-gold mine has been stalled for years as Rio Tinto and joint venture partner Canadian group Ivanhoe Mines Ltd wait for an investment agreement with the Mongolian government. Rio Tinto chief executive Tom Albanese said the joint venture partners had spent more than $US1 billion ($A1.56 billion) on the project while waiting for the finalisation of the agreement. "Clearly, we have to plan additional construction stages carefully, including reviewing costs in the current economic conditions," Mr Albanese said in a statement. "The project will be developed in stages as provided in the IA (investment agreement)." Ivanhoe Mines said last week that a draft investment agreement for the development of Oyu Tolgoi had been endorsed in principle by Mongolia's Cabinet and the country's National Security Council. The draft investment agreement has been submitted to the national parliament for approval. Mr Albansese denied considering any delay in initiating construction of the project. "Rio Tinto remains fully committed to the Oyu Tolgoi copper-gold project," he added. "We're keen to ramp up the project and I welcome the fact that the Mongolian government is moving ahead with the investment agreement process right now." Rio Tinto is in the throes of selling a $US19.5 billion ($A30.43 billion) deal with China's state-owned Chinalco, which will allow the global miner to pay-down some of its massive debt. source：news.theage.com.au