Rio Tinto is facing another blow at the Oyu Tolgoi project in Mongolia with a non-governmental organisation (NGO) initiating a lawsuit relating to the project’s development and finalisation.
The NGO, Darkhan Mongol Nogoon Negdel has filed a lawsuit with the Administrative Court in Mongolia about the government’s process in finalising Oyu Tolgoi’s underground mine development and financing plan (UDP).
Early reports suggest the administrative court has upheld Darkhan Mongol Nogoon Negdel’s claims that the Mongolian government did not follow due process when finalising the UDP.
However, the court’s formal written ruling is not expected to be released for a few weeks.
Rio Tinto stated in a media release that the company “strongly refutes any suggestion that the UDP or any of the foundational Oyu Tolgoi agreements are illegal”.
“The UDP has allowed for the development of the Oyu Tolgoi mine in a manner that has given rise to significant long-term benefits to the people of Mongolia,” the company said.
This isn’t the first challenge Rio Tinto has faced at the Gobi Desert-based mine, which has experienced construction and financial setbacks since construction started in 2010 .
Rio Tinto was faced with budget concerns, workers’ layoffs and accusations of cost overruns and unpaid taxes regarding Oyu Tolgoi, but it remained committed to the copper-gold project.
The company has also delayed production from Oyu Tolgoi by 16 to 30 months, from the first quarter of 2021 to May 2022 or June 2023.
Once fully operational, Oyu Tolgoi is expected to account for nearly one-third of Mongolia’s economy.
Rio Tinto said it would update the market as more information becomes available.