Protesters block copper exports from Rio Tinto mine in Mongolia

Radical Reform Movement protesters blockaded the road from Rio Tinto ↘2.52%‘s Oyu Tolgoi mine to China on Wednesday, halting copper concentrate trucks.abcnews
The mine contributes about 9% of Mongolia’s tax revenue, and the company warned each week of disruption could cost the government $13.3 million.lmeinsight
Mongolia has been pushing to renegotiate what its leaders call an “unfair” profit-sharing deal with Rio Tinto ahead of next year’s national elections, according to Reuters.globalbankingandfinance

Protesters Block Copper Exports From Rio Tinto’s Oyu Tolgoi Mine in Mongolia

Protesters halted copper concentrate shipments from Rio Tinto’s Oyu Tolgoi mine in Mongolia’s Gobi Desert on Wednesday, disrupting deliveries of a mineral vital to China’s renewable energy sector and escalating a dispute over how the country distributes its mining wealth.

The blockade, organized by a group called the Radical Reform Movement, began at 9 a.m. local time when demonstrators set up a barrier on the two-lane highway used to truck copper concentrate to the Chinese border, according to a statement posted by Oyu Tolgoi LLC on Facebook. Videos posted by the group showed protesters gathered around a makeshift barricade of tires beneath a white banner reading “Stop Rio Tinto” in red letters.abcnews

Economic Stakes

Oyu Tolgoi warned that the disruption risked preventing the company from fulfilling contractual obligations and could cause “significant disruptions to the state budget.” The company said each week of interrupted exports could cost the Mongolian government around 35 billion Mongolian tugrik ($13.3 million) in tax revenue. The mine contributes about 9% of Mongolia’s total tax revenues and injects roughly 23 billion tugrik into the economy each day, according to the company’s statement.lmeinsight

At a Cabinet meeting Wednesday, Mongolian Prime Minister Uchral Nyam-Osor directed the justice and internal affairs minister to enforce the law and hold accountable those unlawfully obstructing business operations, according to a government Facebook page.abcnews

Long-Running Dispute

The protest reflects deepening tensions between Mongolia and Rio Tinto over the distribution of mining revenues. The Mongolian government owns 34% of Oyu Tolgoi while Rio Tinto holds the remaining 66% stake and operates the mine. In March, Mongolia’s government moved to reopen negotiations, with Prime Minister Gombojavyn Zandanshatar calling the existing deal “unfair” and seeking 60% of profits, according to Reuters.northernminer

Mongolia is also suing Rio Tinto over alleged tax underpayments of about $450 million tied to depreciation accounting for 2021 and 2022. Political pressure is mounting ahead of national elections next year as copper and gold prices hover near record highs, amplifying public expectations that the country’s mineral wealth should translate into broader prosperity.northernminer

A Critical Copper Asset

Oyu Tolgoi, located about 80 kilometers north of the Chinese border, is one of the world’s largest known copper-gold deposits and a cornerstone of Rio Tinto’s growth strategy. Underground production commenced last year, and the company expects the operation to become the world’s fourth-largest copper mine by 2030. Rio Tinto shares fell 1% on Wednesday in Sydney.abcnews