The Mongolian Government plans to hold emergency Parliament sessions in September, in an attempt to settle uncertainty over the Oyu Tolgoi gold and copper project and address reduced foreign investment and other issues.
The emergency session is slated to begin from 2 September and the mining giant Rio expects that these sessions would accelerate the approval of financing for the $5bn Oyu Tolgoi mine, reports Reuters.
The mining project has being touted as a major revenue generator for the country.
The Oyu Tolgoi gold and copper project is situated in the south Gobi region of Mongolia, around 80km north of the Chinese-Mongolian border and 550km due south of the capital, Ulaanbaatar.
Rio’s unit, Turquoise Hill Resources, owns a 66% stake in the Oyu Tolgoi mine, while the remaining stake is owned by the Mongolian Government.
Last week, Rio Tinto announced 1,700 job cuts at its Oyu Tolgoi mine after a $5bn underground expansion at the copper mine was put on hold.
This decision was made after months of disagreement between the government and Rio regarding taxes and royalties, as well as revenue sharing from the mine.
Mongolia believes only the state has the right to collect royalties.
Last month, Rio halted the planned expansion at the mine, saying it has been notified by the Mongolian Government that terms of the project financing will require approval from Parliament, which subsequently led to a delay in production during the mine’s first phase.
Mongolia believes delays developing the Oyu Tolgoi giant copper-gold mine and uncertainty over rules for foreign investors have led to a steep reduction in foreign direct investment in Mongolia.
In the first half of 2013, Mongolia saw FDI drop by 43%, according to the country’s Central Bank.
Image: Oyu Tolgoi mine has been touted as a major revenue generator for Mongolia. Photo courtesy of Rio Tinto Company.