OTTAWA (Reuters) – Canada’s Ivanhoe Mines and global mining giant Rio Tinto said on Friday they are ready to resume talks with the Mongolian government on their massive Oyu Tolgoi copper and gold project in Mongolia.
The government wants an updated minerals law in effect before restarting talks on an investment agreement for the Oyu Tolgoi project. It has formed a parliamentary committee that will propose changes to the country’s mineral law by Nov. 15.
A draft agreement, which was withdrawn early this year, gave Mongolia a 34 percent stake in the project. Ivanhoe and Rio Tinto estimate their development costs for Oyu Tolgoi at up to $3 billion.
“We are encouraged by the initial steps that have been taken by the new Mongolian government and by the communications that we have had with government representatives,” said Bret Clayton, Rio Tinto’s head of copper and diamonds and an Ivanhoe director, in a statement.
The companies said they met with key government representatives in September to talk about the remaining steps for negotiation and parliamentary approval of the project.
Oyu Tolgoi is expected to produce an average of 440,000 tons of copper and 320,000 ounces of gold a year over a 35-year life.
Shares in Ivanhoe, which is 10 percent owned by Rio Tinto, ended 3.3 percent higher at C$3.15 on the Toronto Stock Exchange on Friday and rose 8.4 percent to close at $2.70 on New York. Rio’s Australian stock dipped 5 percent to A$62.60 and gained nearly 9.8 percent to 2,130 pence in London.