Rio Tinto (RIO.L) said it is in “active negotiations” with Mongolia over reworking terms at the giant Oyu Tolgoi copper mine, one of the world’s largest copper deposits critical for electric vehicle production.
The talks could reshape the economics of a project that supplies up to 30% of Rio Tinto’s copper output and represents a key revenue source for Mongolia’s government.
Key Takeaways
- Mongolia seeks to renegotiate loan terms and management fees
- Talks aim to increase Mongolia’s share of economic returns
- Project supplies critical copper for global electrification drive
Market Context and Strategic Importance
Oyu Tolgoi ranks among the world’s biggest known copper and gold deposits, positioned to meet surging global demand for copper driven by electric vehicles and renewable energy infrastructure1. Mongolia owns 34% of the project, while Rio Tinto controls the remainder through its 51% stake in Turquoise Hill Resources.
The mine is expected to become the fourth-largest copper operation globally by 2030, with production capacity exceeding 500,000 tonnes of copper concentrate annually2.
Government Pushes for Better Terms
Mongolia’s government is seeking to amend loan agreements and reduce management fees to ensure the majority of economic returns flow to Mongolian citizens3. Prime Minister G. Zandanshatar emphasized that constitutional principles require most project benefits to accrue to Mongolia’s people.
Katie Jackson, Rio Tinto’s copper chief executive, said in a February response letter that “the company fully supports the activities of the working groups” and noted that total economic returns to Mongolia will exceed the 53% constitutional minimum over the mine’s lifetime4.
Negotiation Timeline and Scope
The parties agreed to intensify negotiations and resolve disputed issues in phases, targeting completion within the first half of 20265. Discussions cover interest rate reductions on loans Mongolia used to fund its project stake and lowering operational management fees.
Rio Tinto has submitted specific proposals to reduce both loan costs and management fees, which would directly increase Mongolia’s financial returns from the operation.
Historical Context and Future Outlook
The current negotiations follow a 2022 comprehensive agreement that resolved previous disputes and enabled the underground expansion to proceed6. That deal included Turquoise Hill waiving $2.4 billion in debt owed by the Mongolian government.
The mine’s expansion represents a $6.95 billion investment and positions Mongolia as a strategic supplier in the global transition to clean energy technologies requiring substantial copper inputs.
Not investment advice. For informational purposes only.
References
1Bloomberg (March 10, 2026). “Mongolia Seeks to Amend Rio’s Oyu Tolgoi Mine Loan, FT Reports”. Bloomberg. Retrieved March 10, 2026.
2Farmonaut (January 15, 2026). “Oyu Tolgoi Mining: 7 Rio Tinto Shifts In 2026”. Farmonaut. Retrieved March 10, 2026.
3Financial Times (March 10, 2026). “Mongolia presses Rio Tinto to rewrite ‘unfair’ terms of $18bn Oyu Tolgoi mine”. Financial Times. Retrieved March 10, 2026.
4Mongolian Mining Journal (February 14, 2026). “The Government to Intensify Negotiations with Rio Tinto on Increasing the Returns of the Oyu Tolgoi Project”. Mongolian Mining Journal. Retrieved March 10, 2026.
5MNB World (February 13, 2026). “Talks advance on increasing Mongolia’s returns from Oyu Tolgoi Project”. Facebook. Retrieved March 10, 2026.
6Mining Engineering Online (January 25, 2022). “Rio Tinto reaches agreement with Mongolia for Oyu Tolgoi expansion project”. Society for Mining, Metallurgy & Exploration. Retrieved March 10, 2026.