Global miner Rio Tinto Ltd
(ASX:RIO) and Canada’s Ivanhoe Mines have signed an agreement with the Government of Mongolia for the development of the Oyu Tolgoi copper-gold mine in Mongolia.
The long awaited deal, which has been in negotiations since 2001, comes after the Parliament changed a windfall profits tax in August.
Opposing members of parliament have argued that the deal short-changed Mongolia and that the government should hold a 51 per cent stake in the operation.
Under the agreement the Mongolian Government will own 34 per cent of the project with the Sydney Morning Herald reporting that it will also receive a US$250 million advance payment against royalties and taxes.
Rio says production is expected to commence in 2013 with a five year ramp up to full expected production of 450,000 tonnes of copper a year and 330,000 ounces of gold.
Rio Tinto’s 2008 net profit was US$3.676 billion, nearly half what it achieved in 2007.
