June 13, 2013 / 6:35 AM / 6 years ago

Rio Tinto delays Oyu Tolgoi export start-up from June 14

ULAN BATOR, June 13 (Reuters) - Rio Tinto is delaying an event to mark first exports from the $6.2 billion Oyu Tolgoi mine in Mongolia, as it awaits final clearance from the government, sources familiar with the situation said on Thursday.

Reuters and traders had been invited to a ceremony on June 14 at the site in Mongolia’s South Gobi Desert to witness the first exports from the copper and gold mine to China, but were informed late on Wednesday the trip was off.

Oyu Tolgoi LLC said nothing had changed from previous statements that it was expecting first exports before the end of June. Rio Tinto declined to comment.

Start-up of the mine, the biggest in the country, is being closely watched by other companies and investors in Mongolia, who have been rattled over the past year by new regulations and concerns raised by the government over Oyu Tolgoi.

The opening of Oyu Tolgoi is vital for Mongolia as it is expected to make up a third of the country’s economy by 2020.

The mine is also a crucial source of growth for operator Rio Tinto as it aims to ease its dependence on iron ore and cast off small or unprofitable assets.

Rio plans to expand the mine underground, with a final decision expected next year. The expansion hinges on finalizing around $4 billion in project financing, also expected soon.

Rio Tinto’s Turquoise Hill Resources Ltd owns 66 percent of the project, while the Mongolian government owns the remainder.

Mongolia’s prime minister, Norov Altankhuyag, had planned to attend the event at the mine, a government spokesman said earlier in the week.

A spokesperson for President Taskhia Elbegdorj had said it was unlikely he could attend because of activities related to his re-election campaign.

Elbegdorj, who is seen as more supportive of foreign investment than opposition candidates, is expected to win the poll, scheduled for June 26.

“We’re hopeful come the second half of the year people will become a bit more positive on Mongolia,” said Sam Spring, chief executive of Kincora Copper, a copper explorer with a project near Oyu Tolgoi.

“Hopefully, Oyu Tolgoi ramping up and the completion of the project financing helps, as does the presidential election.”

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