Rio Tinto may halt work at mine in protest at Mongolian demands

Rio Tinto Group is considering a temporary halt to construction work at its US$6.2 billion Oyu Tolgoi copper and gold project in Mongolia as the government demands a greater share of profit from the mine, according to two people familiar with the plans.

The group, based in London and the second-biggest mining company in the world, is discussing the suspension of building to protest at Mongolia's demands for a bigger stake in the project and new mining royalty rates, the sources said.

A suspension of work, which may halt mining and processing, is not certain, and is among options that managers are discussing in London, one of the people said.

Bruce Tobin, a spokesman for Rio in Melbourne, said: "We continue to work together with all stakeholders, including the government of Mongolia, to bring the benefits of Oyu Tolgoi to all parties."

He declined to comment on whether Rio was considering a temporary halt.

The dispute comes as the government of Mongolian prime minister Norovyn Altankhuyag tries to maintain support for foreign investment amid growing nationalism and wealth disparity. In October, Rio rejected a second move by Mongolia to renegotiate a 2009 investment agreement for the development of Oyu Tolgoi, which is the world's biggest copper project under construction.