Finance
Mongolia urges rio tinto to rewrite terms of oyu tolgoi copper mine, FT reports
Published by Global Banking & Finance Review®
Posted on March 10, 2026
3 min readLast updated: March 10, 2026
Quick Summary
Mongolia says the terms of Rio Tinto’s Oyu Tolgoi copper mine deal are “unfair,” and is pushing to renegotiate key financial conditions—especially the high interest rate—while warning of potential export tax hikes if talks stall.
Mongolia urges Rio Tinto to rewrite terms of Oyu Tolgoi copper mine, FT reports
Negotiations and Developments Surrounding Oyu Tolgoi Copper Mine
Mongolia's Call for Renegotiation
March 9 (Reuters) - Mongolia is seeking to renegotiate the "unfair" commercial terms of mining giant Rio Tinto's $18 billion Oyu Tolgoi copper mine, the Financial Times reported on Monday.
Mongolia's Prime Minister Gombojavyn Zandanshatar warned Rio in a meeting on Monday that the current deal was "unfair," adding that "this whole situation feels like the Mongolian people and the parliament are being deceived", the newspaper said, citing video footage it had seen.
Rio Tinto's Response
A Rio Tinto spokesperson told Reuters that they are engaged in active negotiations with the Mongolian government, adding that the discussions reflect their continued commitment to working together to achieve Oyu Tolgoi’s full potential for the benefit of all partners.
Upcoming Meetings and Stakeholder Roles
Zandanshatar and other government officials will meet Rio executives, including head of copper Katie Jackson, this week to discuss the terms of the deal, the report said.
Ownership Structure and Project Background
Mongolia owns 34% of Oyu Tolgoi, one of the world's largest-known copper and gold deposits, while Rio holds a 66% stake. The facility is Rio's biggest copper growth project and began open-pit mining in 2011.
Financial Terms and Government Proposals
Loan Terms and Interest Rates
Mongolia took a multibillion-dollar loan from Rio Tinto at a floating interest rate that is currently over 11% to fund its share of the capital expenditure needed to develop the mine, the FT said.
Proposed Changes and Potential Consequences
The government is proposing Rio reduce the interest rate on the loan to less than 6% and cut the annual management fee it charges for the project, the report said, adding that Rio risks an increased rate of export tax if negotiations between the parties go poorly.
Production Expectations and Previous Agreements
Oyu Tolgoi's Production Capacity
At peak production Oyu Tolgoi is expected to produce 500,000 metric tons of copper annually, according to its website.
Debt Waiver and Relationship Reset
In 2022, Rio agreed to waive $2.4 billion in debt owed to it by the government related to Oyu Tolgoi with both sides agreeing to "reset" their relationship.
Additional Reporting
Reuters could not immediately verify the report. Rio Tinto did not immediately respond to a request for comment.
(Reporting by Angela Christy and Gursimran Kaur in Bengaluru; Editing by Christian Schmollinger)
Key Takeaways
- •Mongolia’s prime minister criticized the Oyu Tolgoi agreement as “unfair” and accused Rio Tinto of deceiving the people and parliament (Financial Times via Reuters).
- •The government is seeking to lower the floating interest rate on a Rio‑Tinto‑funded loan—currently above 11%—to below 6%, and reduce annual management fees, or face higher export taxes. 官方 talks to follow this week.
- •Oyu Tolgoi is one of the world’s largest copper projects, aiming to produce about 500,000 tonnes annually between 2028–2036, but Mongolia has received limited dividends so far due to debt servicing (Rio‑funded loans totaling over $12bn at elevated rates).
Frequently Asked Questions about Mongolia urges Rio Tinto to rewrite terms of Oyu Tolgoi copper mine, FT reports
1Why is Mongolia seeking to renegotiate the Oyu Tolgoi copper mine deal?
Mongolia believes the current terms with Rio Tinto are unfair, citing high interest rates and management fees.
2What specific changes has the Mongolian government proposed for the Oyu Tolgoi agreement?
Mongolia is asking Rio Tinto to lower the loan interest rate below 6% and reduce the annual management fee.
3How much of the Oyu Tolgoi copper mine is owned by Mongolia?
Mongolia owns 34% of the Oyu Tolgoi copper mine, with Rio Tinto holding the remaining 66%.
4What could happen if Rio Tinto and Mongolia do not reach a new agreement?
Rio Tinto could face a higher export tax if negotiations with the Mongolian government fail.
5How much copper is Oyu Tolgoi expected to produce at peak production?
At peak production, Oyu Tolgoi is expected to produce 500,000 metric tons of copper annually.