Rio Tintos copper and diamond chief executive Arnaud Soirat has put pressure on Mongolia to support its planned $ 5.3 billion Oyu Tolgoi mine underground expansion, saying foreign companies will be looking at it as a "test case" for future investment. The company, which in the last two years has stepped up efforts to find new copper deposits worth of being developed into mines, applied last year for exploration permits in the South American countrys northern region of Arica.
He noted that the company is currently Mongolias largest foreign investor, having ploughed so far more than $ 7 billion into the first phase of its Oyu Tolgoi mine. Soirat said the company will continue to invest over $ 5 billion in the country, tied to the underground expansion of the giant project, at a rate of $ 1 billion per year.In February, the government reinstated a decade-old agreement ordering the company to source power for Oyu Tolgoi domestically, a move could raise the costs of the ongoing expansion of mine, a strategic partnership between Mongolias government (34%) and Turquoise Hill (66%), of which Rio Tinto owns 51%.
The mining giant is also facing increasing pressure from shareholders about its alleged lack of transparency about pledges to the Mongolian government and escalating costs for the expansion. It has also been questioned about its treatment of minority shareholders at Turquoise Hill.