Rio Tinto says Mongolia mine cannot stop all Russian imports
March 10, 2022
The top leader says it is important to maintain healthy, peaceful and balanced relations with big and powerful neighbors.
Rio Tinto is working to maintain a steady supply of fuel and other goods for its copper operations in Mongolia but has said it cannot stop buying from Russia altogether, a senior executive at the mining giant has said.
The Anglo-Australian company is developing Oyu Tolgoi in Mongolia, one of the largest known copper and gold deposits in the world. Rio controls about two-thirds of the project, with Ulanbaatar controlling the rest.
While Rio has begun looking at alternative fuel sources for Oyu Tolgoi, the company doesn’t believe it can stop buying from Russia altogether, said Bold Baatar, head of Rio’s copper business.
Rio has supply agreements for a host of products with Mongolian suppliers, many of whom source materials from Russia.
“The reality is that Mongolia has two very big, powerful neighbors, so it’s very important for us to maintain healthy, peaceful and balanced relations,” Baatar said of his home country.
Mongolia is bordered to the north by Russia and to the south and east by China, leaving Rio few options to secure supplies from the project, which is expected to be the world’s third-largest copper mine.
In the midst of Russia’s invasion of Ukraine, several companies and countries announced that they would cease their activities in Russia and buy Russian products.
Baatar said it would be “very difficult” for Rio’s Mongolian operations to stop all imports from Russia, adding that some supplies transit through Russia via Kazakhstan.
“This kind of supply is acceptable unless the world wants to completely close Russian borders, which is not possible,” he said.
Long Feud Ended
Rio in January ended a long-running dispute with the Mongolian government over control of Oyu Tolgoi. The agreement marked a positive development for the company, which is facing a significant decline in projects in Serbia, the United States and Guinea.
Baatar appeared on a copper panel at the conference alongside Richard Adkerson, chief executive of Freeport-McMoRan, and Julien Rolland of Trafigura.
Baatar told the panel that it was “pretty imperative” for the United States to develop more copper mines to supply the copper needed for electric vehicles and renewable energy technologies.
Rio is trying to develop the Resolution Copper project in Arizona, but has run into Native American opposition.
Mining companies “should respect the wishes of communities, and many communities do not want to see mining,” Baatar said.
When asked what this means for the project in Arizona, Baatar said he believes a deal can be reached with local Native Americans.
“I totally respect their point of view on the project and I really hope that we can find a common and mutual solution,” he said.
- Reuters, with additional editing by George Russell