Rio Tinto Limited
(ASX:RIO) has stopped work on the underground development of its Oyu Tolgoi mining project after being told its financing agreement with the Mongolian government needs parliamentary approval.
Rio says the Mongolian government had told it provisional project financing had to be approved by parliament - which is currently in recess - and the process may take some time to work through.
As a result, Rio says all funding and work on the underground development will be delayed until the matters are concluded.
The Mongolian government will earn its 34 per cent stake in the mine’s revenue, but capital cost issues have sparked tensions between the parties.
Rio says it remains committed to working with the government to secure financing for the project.
Rio Tinto reported a net loss of $2.9 billion in the 2012 financial year.
