Political parties demand to nationalize OT

Amid fraud charges in Mozambique and Guinea, Rio Tinto is facing another turmoil in one of its major projects. After the bribery allegations of Mongolia’s ex-finance minister Bayartsogt Sangajav, who is currently under investigation of Swiss prosecutors and Independent Authority Against Corruption of Mongolia, Mongolian People’s Revolutionary Party, Civil Will-Green Party, Green Party and Mongolian National Democratic Party held a press conference on the issues concerning Oyu Tolgoi investment agreement. The coalition is demanding the Government officials to terminate the investment contract and investigate the people involved. With the case being added up to Rio’s current challenges, Mongolian political parties are looking to detach Rio from its (as Rio Tinto's copper and coal group chief development officer Craig Kinnell described in 2015) biggest and best project across the group. The representatives of four political parties, including the former president Enkhbayar Nambar, claimed that Rio Tinto undervalued the resources of Oyu Tolgoi at USD 400 billion at the time of signing, which was allegedly evaluated at USD 600 billion by international organizations.

“The Government of Mongolia purchased 34 percent ownership in the mine which is located on its own territories under massive debts and now, the public is responsible for the repayment, not the officials who signed the agreement,” addressed the former president. Consequently, the Parliament Speaker Enkhbold Miyegombo issued a directive to establish a working group responsible for inspecting and reviewing the investment agreement of Oyu Tolgoi last friday. The working group will be led by Damba-Ochir Dorjdamba, Head of Parliament’s Standing Committee on Economy. Rio Tinto is facing similar charges related to other underdeveloped countries. According to Bloomberg, the company is currently facing probes from the U.K.’s Serious Fraud Office and Australian regulators into whether it paid bribes to secure an iron ore deposit in Guinea. Meanwhile, U.S. authorities have filed fraud charges against the firm and two former executives claiming they inflated the value of Mozambique coal assets acquired in 2011. In addition, the company is exiting coal industry as it entered an agreement with Whitehaven Coal Limited to sell its 75 percent stake in its Winchester South Coal development project in Queensland, Australia last week. According to Mining Global, Rio recently announced to sell its Hail Creek and Valeria coal assets to Glencore in a deal worth USD 1.7 billion.