Oyu Tolgoi LLC Executive Director Fired Following Rio DisputeMichael Kohn
The executive director for Erdenes Oyu Tolgoi LLC, Tserenbat Sedvanchig, has been fired after nine months at the state-owned company, a period marked by disputes over mine costs and funding with partner Rio Tinto Group.
He was replaced by former deputy prime minister and member of Parliament Davaadorj Ganbold, 56, at a board meeting today, the national Montsame News Agency reported on its website.
The company known as Erdenes OT controls 34 percent of the $6.6 billion Oyu Tolgoi copper and gold mine. Rio Tinto controls 66 percent through its Turquoise Hill unit. Last week, 1,700 workers were let go as the partners failed to agree on operations on the $5 billion underground portion of the mine.
“The project should work for both sides, Mongolia and Rio Tinto. Something should be done to find consensus,” Ganbold said today in an interview. “It’s a marriage between the two side and I will try to make it work, to push the project forward.”
Sedvanchig last month told Rio Tinto that the Mongolian Parliament is responsible for approving a multi-billion dollar package to finance the second stage expansion of the mine. The news, announced in a July 29 press release by Rio Tinto, triggered a 20 percent drop in the share price of Turquoise Hill Resources.
Mongolia’s Prime Minister Norovyn Altankhuyag had to step in and overrule Sedvanchig, saying the decision to approve project financing could be made by the board of Oyu Tolgoi LLC.
Ganbold “may be an ideal candidate to do what needs to be done as it relates to getting OT back on track,” Nick Cousyn, Chief Operating Officer at brokerage BDSec, wrote in a note to clients.