Oyu Tolgoi Director Announces Intent to Resign, News.mn Says

Puntsag Tsagaan, one of four Mongolian directors on Oyu Tolgoi LLC’s board, signaled his intention to resign, website news.mn reported.

The resignation may be submitted today, the website quoted Tsagaan as saying in an interview. Tsagaan, who joined the Oyu Tolgoi board in June 2010, said his resignation was in line with the completion of the first phase of the mine and the next phase would require a new board member.

Tsagaan’s stepping down is the latest episode in the Mongolian government’s long spat with partner Rio Tinto Group over the $6.6 billion Oyu Tolgoi mine. The companies are at loggerheads over a $5 billion project financing package to develop the second stage of the mine.

The project financing conditions for the second stage of the mine are “unacceptable” for Mongolia, Tsagaan said.

Earlier this month, Turquoise Hill Resources, the unit of Rio Tinto (RIO) that owns 66 percent of the mine, announced it was suspending operations on the underground part of the mine. About 1,700 workers were subsequently laid off.

The role on the board doesn’t complement his day job as chief of staff for the Office of the President of Mongolia, Tsagaan said.

To contact the reporter on this story: Michael Kohn in Ulaanbaatar at mkohn5@bloomberg.net

To contact the editor responsible for this story: Jason Rogers at jrogers73@bloomberg.net

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