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Rio Tinto to Cancel Mongolia’s $2.3 Billion Debt

  • Letter from Rio proposes waiving nation’s $2.3 billion debt
  • Major mine’s underground expansion hit by rising costs, delays
The Oyu Tolgoi copper-gold mine in the South Gobi desert, Mongolia.
The Oyu Tolgoi copper-gold mine in the South Gobi desert, Mongolia.Photographer: Taylor Weidman/Bloomberg

Rio Tinto Group will cancel $2.3 billion in debt owed by Mongolia as the miner seeks to push forward with expanding the giant Oyu Tolgoi copper project that’s been beset by years of disputes, delays and cost blowouts.

Rio’s Chief Executive Officer Jakob Stausholm proposed improved terms for a 2015 financing agreement that underpins the mine’s underground expansion, according to a Dec. 13 letter to Prime Minister Oyun-Erdene Luvsannamsrai posted on Mongolia’s government website. Writing off the debt would speed up the timeline for when the country can start to receive dividends, it said.