Rio Tinto share price: CEO claims offer to Mongolian officials is final

on Mar 30, 2015
Updated: Oct 21, 2019
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Rio Tinto (LON:RIO) shares have been trading in positive territory so far in today’s session in London amid news that the FTSE 100-listed miner gave its “best and final offer” to restart the long-delayed Oyu Tolgoi mine to the Mongolian government back in November and they won’t change it. Rio is reportedly locked in negotiations with Ulaanbaatar officials over the second stage in the development of its copper and gold mine, saying that only a few matters remain on the table, although they could be a potential deal breaker.

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As of 12:10 BST today, Rio’s shares were trading at 2831.50p, up 0.78 percent intraday and outperforming the blue-chip FTSE 100 index which is currently 0.39 percent higher at 6,881.42 points. Despite today’s advance, the miner’s stock has shed over four percent of its value since the turn of the year.
Rio chief executive Sam Walsh said in an interview with Bloomberg on Saturday that negotiations were “down to a few issues and these issues are deal breaker type issues […] And we are not asking for anything that is out of the ordinary or special to Rio Tinto.”
Talks are aimed at determining a stalled $5.4 (£3.65 billion) billion expansion of the Oyu Tolgoi project under development by Rio subsidiary, Turquoise Hill Resources Ltd. In December, Mongolia’s Prime Minister Saikhanbileg Chimed claimed that his priority is to resolve a dispute with Rio over taxes and cost overruns.
The Anglo-Australian miner said it submitted proposals to try and resolve some of the existing arguments between the two sides, including a $127 million tax claim that has already been reduced to $30 million, and the approval of a $4 billion project financing package for the development of the second phase in the development of the mine. Reuters quoted Sam Walsh as saying that this was Rio’s “best and final offer and we believe this a very reasonable approach to resolving the outstanding issues”.
Rio’s Turquoise Hill Resources owns a 66 percent shareholding in the $6.5 billion Oyu Tolgoi, with the Mongolian government holding the remaining stake. The first, open-cut phase of the project is already up and running. The offshoot of the FTSE 100-listed group reported $1.6 billion in revenue for last year from the sale of 733,700 tonnes of concentrate from the mine.
As of 13:40 BST, Monday, 30 March, Rio Tinto plc share price is 2,820.00p.

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