The Oyu Tolgoi Agreement: What You Need to Know

The Oyu Tolgoi Agreement is a mining deal that was signed between the Mongolian government and Turquoise Hill Resources, a subsidiary of Rio Tinto, in 2009. The agreement allowed Turquoise Hill Resources to explore and mine copper and gold at the Oyu Tolgoi site in the Gobi Desert.

The Oyu Tolgoi mine is one of the largest copper and gold mines in the world, with estimated reserves of over 80 billion pounds of copper and 40 million ounces of gold. The mine is a major source of revenue for Mongolia, and it is expected to contribute significantly to the country`s economic growth.

The agreement between the Mongolian government and Turquoise Hill Resources has been controversial since its signing, with some critics arguing that the terms of the deal are too favorable to the mining company. One of the main points of contention is the royalty rate that Turquoise Hill Resources pays to the Mongolian government. The agreement sets the royalty rate at 5%, which some critics argue is too low given the size and value of the mine.

Another issue that has been raised is the extent to which the Mongolian government has control over the mine. Under the terms of the agreement, Turquoise Hill Resources has a majority stake in the mine, and the Mongolian government has a minority stake. Some critics argue that this gives the mining company too much control over the operation of the mine, and may limit the benefits that Mongolia receives from the project.

Despite these concerns, the Oyu Tolgoi mine has been a major success for Turquoise Hill Resources and the Mongolian government. The mine began production in 2013, and it has already contributed significantly to Mongolia`s economy. The project has also created thousands of jobs for Mongolians, and has provided opportunities for local businesses and suppliers.

In recent years, however, the relationship between the Mongolian government and Turquoise Hill Resources has become strained. The government has accused the mining company of violating the terms of the agreement, and has sought to renegotiate the terms of the deal. Turquoise Hill Resources has denied any wrongdoing, and has argued that the terms of the agreement are fair and reasonable.

The future of the Oyu Tolgoi mine is uncertain, with ongoing disputes between the Mongolian government and Turquoise Hill Resources. However, the mine remains a significant source of economic growth and opportunity for Mongolia, and its success will continue to be closely watched by the international community.

In conclusion, the Oyu Tolgoi Agreement is a mining deal that has been controversial since its signing in 2009. While the mine has been a major success for Turquoise Hill Resources and the Mongolian government, there are concerns about the terms of the deal and the extent to which the Mongolian government has control over the project. The future of the mine is uncertain, but it remains a significant source of economic growth and opportunity for Mongolia.