Rio Tinto Works to Secure Access to Russian Fuel for Mongolia Project – Exec | Investment News
HOUSTON (Reuters) – Rio Tinto Ltd is working to maintain a steady supply of fuel and other goods for its copper operations in Mongolia from suppliers who buy in Russia and elsewhere, a senior executive at the mining giant said on Wednesday.
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 started looking for alternative fuel sources for Oyu Tolgoi, the company doesn’t believe it can completely stop buying from Russia, Bold Baatar, head of Rio’s copper business, said on the sidelines of the conference call. on CERAWeek Energy in Houston. 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.
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, managing director of Freeport-McMoRan Inc 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 mutual and common solution,” he said.
(Reporting by Ernest ScheyderEditing by Marguerita Choy)
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