Mongolia is pushing to renegotiate the terms of its joint venture with Rio Tinto on the $18 billion Oyu Tolgoi copper mine, with Prime Minister Zandanshatar Gombojav stating the current deal is "unfair." The Prime Minister met with Rio Tinto's head of copper, Katie Jackson, on March 9, 2026, to discuss these demands. While Rio Tinto presented some proposals regarding management fees and high interest rates on shareholder loans, these were deemed insufficient by Mongolia.
Key Mongolian demands include increasing its share of project benefits to over 60%, significantly reducing the interest rate on shareholder loans (currently over 11% and proposed to be under 6%), lowering management fees, ensuring Oyu Tolgoi LLC's operational independence by 2030, and distributing dividends to Mongolia by 2026. Mongolia also seeks to resolve issues related to Entrée Resources' licenses, aligning with the constitutional mandate that the majority of natural resource benefits accrue to the people.
The current financial structure has drawn criticism, with project debt reaching $20 billion by 2025. Mongolia's 34% stake was financed through shareholder loans from Rio Tinto, meaning dividends can only flow after full debt repayment, delaying anticipated dividends from 2019 to an estimated 2041. Rio Tinto had previously agreed to waive $2.4 billion in debt owed by the government in 2022 to reset their relationship. Political and public debate in Mongolia has intensified, fueled by rising copper prices and resource nationalism, with politicians mindful that the issue will be a factor in upcoming elections.
