Mongolia Links Copper Royalty Cuts to Oyu Tolgoi Talks
- Amar Adiya
- 10 minutes ago
- 3 min read
Mongolia’s government has set itself a deadline. By the end of June 2026, it wants to settle its dispute with Rio Tinto over the Oyu Tolgoi copper mine, following a parliamentary resolution passed in December 2025. To get there, it has frozen a reform that would have cut the copper royalty surcharge, confirmed by mining minister Mining minister Damdinnyam. The tax cut now depends on how talks with Rio Tinto and Entrée Resources turn out.
Some progress has already come. In May, the two sides agreed to halve Oyu Tolgoi’s management fees and remove duplicate charges, a deal expected to cut project costs by $2.2 billion and add $1.5 billion to Mongolia’s take over the mine’s life. The Prime Minister called it the first result. With construction complete, Rio Tinto could make this concession without touching the parts of the deal that affect its long-term returns. The harder questions, on loan rates and licence transfers, remain open.
Two issues now sit at the centre of the standoff. The first is the shareholder debt, which by late 2025 stood at $20.2 billion, with $16.3 billion owed to Rio Tinto. The effective rate has averaged 8% over the past decade and exceeded 10% in recent high-interest periods.
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