By B. Bayar

The Oyu Tolgoi copper and gold deposit in Mongolia’s Umnugovi Province is one of the world’s largest. The project is owned by Rio Tinto (66 percent) and the Government of Mongolia (34 percent). Open-pit mining began in 2011, while underground production started in 2023.

Partnerships are expected to benefit both sides equally. However, many Mongolians believe the 2009 Oyu Tolgoi Investment Agreement has failed to deliver fair returns to the country. Even former Prime Minister S. Bayar, who signed the agreement on behalf of Mongolia, has acknowledged that the government’s decision to take a 34 percent stake without sufficient financing left the country burdened with debt and interest payments instead of long-term benefits.
More than a decade later, Mongolia still does not know when—or how much—it will receive from its 34 percent share. Public debate continues as Rio Tinto and some politicians present conflicting interpretations of the project's financial outlook.
One of the main concerns is transparency. Detailed information on the project's revenues, expenditures and financial transactions is not publicly available. Oyu Tolgoi's export earnings are processed through foreign banks rather than Mongolia's banking system, making it difficult for the public to independently verify export volumes and revenue.

For years, politicians and economists have proposed routing the project's payments through Mongolian commercial banks to improve transparency and strengthen the country's financial sector. Earlier, investors argued that Mongolian banks lacked the capacity to handle transactions of such scale. Although the banking sector has since become significantly stronger, similar proposals made in recent years have failed to advance.
Supporters argue that processing payments through domestic banks would improve financial oversight, strengthen Mongolia's banking industry and allow the country's financial institutions to play a greater role in one of its largest mining projects. Instead, financial settlements continue to be handled abroad.

The current arrangement is largely based on several legal agreements. The 2009 Investment Agreement allows Oyu Tolgoi to hold overseas bank accounts and manage export revenue outside Mongolia. The 2015 Dubai Agreement, signed to finance the underground mine, also required revenue and loan accounts to be maintained in foreign financial centres under the conditions set by international lenders. In addition, Rio Tinto's international corporate structure and tax arrangements further limit the Mongolian authorities' ability to monitor financial flows directly.

The issue is not whether investors should control their own income. Rather, many in Mongolia argue that export revenue, production costs and profits should be fully recorded, transparent and subject to proper financial reporting. Greater transparency, they believe, would strengthen public trust while protecting the rights of both investors and the Mongolian state.
Many legal experts therefore argue that revising Article 9.10 of the Investment Agreement—which governs investors' rights over funds, foreign currency, export revenue and financial transactions—would improve transparency without restricting legitimate business operations. Such changes would ensure that export earnings are properly recorded, financial reporting becomes more transparent, and confidence between both parties is strengthened.