Rio Tinto to meet Mongolian government on tax, investment issues
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E-mail Xinhua, February 6, 2013
Mining giant Rio Tinto said Wednesday that it would meet with Mongolian officials to discuss some investment and tax issues it faces in the country.
The Anglo-Australian mining group, which is leading construction of the Oyu Tolgoi gold-copper mine in Mongolia's southern Gobi region, denied criticism that the mine did not pay taxes and fees to local authorities.
"Some people incorrectly accuse Oyu Tolgoi of not paying its taxes. In fact, in 2012 Oyu Tolgoi paid a total of 280 million U.S. dollars in national and local taxes and other government fees," Rio Tinto said in a statement.
Mongolian leaders and lawmakers complained Friday in parliament about increased investment costs in building the Oyu-Tolgoi gold-copper mine, saying it was not contributing much to development of the local area.
The mine was also accused of not building a new town near it.
"Neither the original feasibility study for the mine nor the Investment Agreement have plans or commitments to build a new town ... this is not a budgeted expense under the feasibility study. However, Oyu Tolgoi will support the government of Mongolia to develop Khanbogd into a town that will support accommodations for Oyu Tolgoi's workforce."
The Oyu Tolgoi mine cannot build a town on its own in Mongolia, where the responsibility for town planning, administration and maintenance sits with the government, Rio said.
Mongolian Prime Minister Norov Altanhuyag said during last week's parliamentary session that the government asked the mining company "to explain why the investment is increasing. They did not explain."
He said that if the initial investment was increased by 2 billion dollars "since we are financing our 34 percent stake, our cost is increased. Secondly, our profit ... is decreasing."
A shareholders meeting of Oyu Tolgoi LLC, joint venture between Rio Tinto and the Mongolian government, which holds the license of the Oyu Tolgoi deposit, is set under way to discuss increased initial costs to build the mine.
Rio Tinto currently owns 66 percent of Oyu Tolgoi LLC, while the Mongolian government holds 34 percent. Endi
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