Rio Oyu Tolgoi Said to Lay Off About 2000 Amid Dispute, BTV Says

August 15 03:11 2013 Print This Article

www.bloomberg.com  Aug 14, 2013

About 2,000 workers at Rio Tinto Group’s $6.6 billion Oyu Tolgoi mine in Mongolia have been laid off, Bloomberg TV Mongolia reported today.

BTV Mongolia cited one of the laid off workers and a letter from Redpath Mongolia LLC, a contractor that employs workers at the copper and gold mine owned jointly by Rio Tinto and the Mongolian government. The letter confirmed the layoffs without specifying the number, BTV Mongolia reported.

The employees of Redpath Mongolia, which is building the underground portion of the mine, were handed termination notices that cited a decision by Oyu Tolgoi LLC’s board of directors. BTV Mongolia obtained a copy of the letter.

The decision to lay off the workers comes after months of disagreement between the government and Rio over how to share revenue from the mine. Concerns over the project’s fate have already hurt the Mongolian economy, with foreign direct investment plunging 43 percent this year.

The Redpath employee said the number of workers laid off was announced at a company briefing on Aug. 12, BTV Mongolia reported. The letter gave workers 45 days notice.

Rio controls Oyu Tolgoi through its Turquoise Hill Resources Ltd. (TRQ) unit, which owns 66 percent of the mine. The government of Mongolia holds 34 percent. On Aug. 12, Turquoise Hill said funding and development of the mine’s underground expansion would be delayed until “matters can be resolved with the Mongolian government and a new timetable has been agreed.”

Bloomberg TV Mongolia is a joint venture between Bloomberg Television and Trade and Development Bank of Mongolia.

To contact the reporter on this story: Michael Kohn in Ulaanbaatar at mkohn5@bloomberg.net

To contact the editor responsible for this story: Jason Rogers at jrogers73@bloomberg.net

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Saranchimeg Enkhee
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