At a time when mining contractors across the world are experiencing hardships with reduced commodity demand from across the world, Rio Tinto has been able to sustain itself with ingenious business strategies and is being hailed a survivor. However, the mining giant is now facing an issue with its copper exports in Mongolia.
Rio Tinto CEO Jean-Sébastien Jacques stated that the dispute that the company is having with China will be resolved in a short while and hence there was no reason for concern. He went on to explain that Rio Tinto was working with the regional authorities and this will help the mining giant’s Mongolian subsidiary resume the exports shortly.
Rio Tinto’s Mongolian subsidiary had to stop copper exports from Oyu Tolgoi mine in Mongolia after the authorities in China closed the border. Instead, the Chinese authorities asked Rio Tinto to use a different route to ship the copper. The company stated that this move had affected the truck drivers, who were forced to wait in the extreme cold.
It is believed that the closure of the border was in response to the Dalai Lama’s visit to Mongolia. The Chinese politburo does not recognise the Dalai Lama as the spiritual leader of Tibet.
Jacques was responsible for commencing production at the Oyu Tolgoi copper mine when he was heading Rio Tinto’s copper division. He was not overly concerned about the latest development. He said that previous issues were resolved by working with the authorities, and this time they will also be resolved.
The Mongolian mine is the company’s flagship project. Earlier in 2016, Rio Tinto had approved a $5.3 billion expansion plan to mine deeper for copper deposits. Nearly all the copper mined from the Oyu Tolgoi mine is sent to China, which has the distinction of being the world’s largest metal consumer.