Mongolia demands Rio Tinto to renegotiate the profit-sharing!
Mongolia believes that the previous negotiation terms were too disadvantageous for Mongolia, so it must sign a new agreement. Mongolia hopes to re-negotiate the existing business cooperation terms for the Oyu Tolgoi copper mine project, which is worth 18 billion US dollars under Rio Tinto's ownership.
The Oyu Tolgoi copper mine project began open-pit mining in 2011. Mongolia has proposed that Rio Tinto reduce the loan interest rate from 11% to below 6%, and lower the annual management fee of the project. Mongolia owns 34% of the shares in Oyu Tolgoi, while Rio Tinto holds 66% and is responsible for operations.
It is reported that Mongolia is dissatisfied with the current profit-sharing plan because it feels it is being taken advantage of, which is also a common practice. Previously, domestic businessmen who went to Mongolia for business also encountered situations where contracts were frequently canceled. Now it's Australia's Rio Tinto Group's turn to revise the contract and terms, making the entire agreement more favorable and beneficial to Mongolia.
Naturally, if the conditions are favorable to Mongolia, they are not favorable to Australia. Therefore, the Australian side has not yet accepted Mongolia's request to modify the terms. After all, no one can just watch their hard-earned benefits be given away. If Mongolia sees that negotiations fail, it will probably take some measures to trouble Rio Tinto Group, otherwise friendly negotiations will not be possible, and without some means, it is impossible to achieve.
For Mongolia's sudden proposal to modify the contract agreement, it cannot be considered as an unexpected event. After all, for a small country, its economic and financial strength is already limited, and now the finances are even tighter. Therefore, it can only try to recover benefits from its already sold projects. If it cannot recover, there will certainly be some subsequent measures. Of course, these are all things that have not happened yet.
But since Mongolia has proposed to modify the agreement, it is unlikely to give up easily. It is an action after careful consideration. The hardships for Australia's Rio Tinto Group are still ahead, step by step, slowly coming.
Original article: toutiao.com/article/1859424819595271/
Statement: This article represents the views of the author himself.