By B.Tumuruu
The Oyu Tolgoi project is one of the largest joint ventures between the Government of Mongolia and Rio Tinto Corporation, established in 2009 under the current Investment and Shareholders’ Agreements. Since then, the two sides have continued discussions on key financial and operational terms of the project.
The Mongolian public has long called for greater national benefits from Oyu Tolgoi. However, the high interest rate on loans provided by Rio Tinto to the project has created financial pressure on Mongolia’s share. The company currently borrows funds from its parent group at 11 percent interest, while the Government of Mongolia and private sector entities access international markets at 5–8 percent, prompting criticism over fairness.
Gold and copper prices have remained high in recent years, which gives confidence that the proposal to reduce loan interest will be positively received. Currently, the Government of Mongolia secures loans from international markets at 5–6 percent interest, while private companies borrow at 7–8 percent. In contrast, Oyu Tolgoi has been borrowing from Rio Tinto at 11 percent, which has drawn criticism for being inconsistent with market principles.
To address this, the Government of Mongolia and Oyu Tolgoi LLC, the company implementing the project, began official negotiations yesterday on revising the loan interest rate specified in the investment framework.
According to Finance Minister Javkhlan Bold, who leads the government’s working group established in September 2025, “The government formed a new task force to work in several directions. First, we will discuss the investor loan interest rate outlined in the Investment Agreement. We will also review the management agreement and the future utilization of the ore deposit.
“The original Investment Agreement stated that Mongolia’s return should reach 53 percent, but actual calculations have fallen short. This issue is not solely due to loan interest — it also relates to the management contract and other associated costs. The matter was discussed at a Cabinet meeting, and we have received a mandate to pursue a reduction in the investment loan interest rate. It is too early to say by how much, but official negotiations begin today,” he said.
Government sources report that Oyu Tolgoi LLC currently owes about USD 12 billion to Rio Tinto, half in principal and half in accumulated interest. Under the agreement, Mongolia will begin receiving dividends from its 34 percent stake only after the debt is fully repaid.
Public attention remains high as the negotiations progress, reflecting ongoing hopes that Mongolia will finally secure fair returns from the Oyu Tolgoi project.
Эх сурвалж: “Зууны мэдээ” сонин
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