Rio Tinto Share Price: Miner to Start Exports from Oyu Tolgoi

on Jun 20, 2013

UK-based mining company Rio Tinto (LON:RIO) plans to make the first shipment of copper from its $6.2 billion Oyu Tolgoi mine in Mongolia tomorrow, June 21, Reuters has reported. Journalists have been invited to attend a ceremony at the copper and gold mine in the southern Gobi Desert in Mongolia to mark the first export, a week later than initially planed. The event had been postponed due to a demand from the Mongolian government that Rio Tinto kept all export revenue in the Asian country, Prime Minister Norov Altankhuyag said earlier this week.

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**Rio Tinto Resolves Dispute with Mongolia, Sources Say**
According to inside sources, that issue has now been resolved and Rio Tinto can choose where to put the export revenue, Reuters said. Given that the company’s accounts in Mongolia had been temporarily frozen earlier this year, keeping funds there would not be an attractive option, according to market observers. Yet, there is still not clarity on Rio’s agreement with the Mongolian government. The miner has declined to comment on the outcome of the dispute and on the event set for tomorrow.

**Production Rising**
Rio Tinto operates and controls Oyu Tolgoi through its majority stake in Canada-based Turquoise Hill Resources (TSE:TRQ), which owns 66 percent of the mine. The remainder is held by the Mongolian government.
Rio has been producing at Oyu Tolgoi for several months. The first copper-gold concentrate was produced in January and the miner had forecast exports would begin by the end of June. The company said in February that it would not begin exporting until it resolved disputes with Mongolia over costs, royalties, management fees and project financing.

Rio’s Chief Executive Officer Sam Walsh last month said the mining operation had concentrate bagged and ready for shipment as production continued to ramp up. The CEO also said that progress had been made to resolve outstanding issues with the government and to secure project financing to continue developing Oyu Tolgoi.
When fully operational in 2020, Oyu Tolgoi is set to produce an average of 450,000 metric tonnes of copper and 330,000 ounces of gold a year as well as silver and molybdenum. By that time, the mine would make up a third of Mongolia’s economy.

**Rio Tinto Share Price Tumbles, Turquoise Hill Also Falls**
!m[Shipments from Mongolian Mine to Begin on June 21 ](/uploads/story/3247/thumbs/picq_inline.jpg)
The Rio Tinto share price declined significantly during early trading hours in London today. By 10:22 GMT the stock has fallen 4.48 percent, standing at 2,677.50p. In the year to date, shares in the miner have fallen nearly 24 percent, reflecting volatile commodities markets and challenges at Rio Tinto’s international operations.

The shares of the majority owner of Oyu Talgoi, Turquoise Hill Resources also declined today. The Turquoise Hill share price on the Toronto Stock Exchange was C$6.18 at 10:30 GMT, 2.52 percent below its previous day’s closing level. Similarly to its parent company, the Canadian-based subsidiary has lost almost 19 percent of the value of its shares since the beginning of 2013.
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