Jobs axed in Rio dispute
The layoffs are a mix of contractors and employees.
The layoffs at Oyu Tolgoi, owned by a Rio unit and the Mongolian government, follow months of disagreement between the two sides over how to share revenue. The lack of a decision has already hurt the Mongolian economy, with foreign direct investment down 43 per cent this year. A planned $5.1 billion underground expansion has been delayed, Rio said.
"These layoffs bring a human element to it," Dale Choi, the founder of Independent Mongolian Metals & Mining Research, said. "These people are going to be unhappy. They might start talking about their plight to the government or the media. So it escalates the tensions."
Rio, the world's second-biggest mining company, controls Oyu Tolgoi through its Turquoise Hill Resources unit, which owns 66 per cent of the mine. The government of Mongolia holds the rest. The operation employed about 13,500 people at the end of June.
Frequently Asked Questions about this Article…
As many as 1,700 workers at Rio Tinto’s $6.6 billion Oyu Tolgoi copper and gold project have been laid off amid a financing dispute. Shipments began last month, and the layoffs are a mix of contractors and employees.
The layoffs followed months of disagreement between Rio Tinto’s unit and the Mongolian government over how to share revenue from the mine. The financing and revenue-sharing dispute stalled decisions and prompted the workforce reductions.
The mine is controlled through Turquoise Hill Resources, a unit linked to Rio Tinto, which owns 66% of Oyu Tolgoi. The government of Mongolia holds the remaining stake.
The operation employed about 13,500 people at the end of June, before the reported layoffs of up to 1,700 workers.
Yes. The lack of a decision on revenue sharing has already hurt the Mongolian economy, with foreign direct investment reported to be down 43% this year.
Rio Tinto said a planned $5.1 billion underground expansion has been delayed as a result of the ongoing dispute and financing uncertainty.
The layoffs included both contract workers and direct employees at the Oyu Tolgoi operation.
Observers say the layoffs add a human element that could escalate tensions. Dale Choi of Independent Mongolian Metals & Mining Research warned laid-off workers may voice their grievances to the government or media, increasing pressure on talks.
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