LONDON (ShareCast) - Disagreements between Rio Tinto (Xetra: 855018 - news) and the Mongolian government over the Oyu Tolgoi copper and gold mine will not halt a planned June start for commercial production, officials have stressed.
Rio Tinto and Mongolia have been tussling over the future of the world's largest untapped copper deposits as the mine looks set to increase output.
The two failed to agree on a deal last month after disputing over taxes and rising costs which Mongolia believed would cut into prospective earnings for the impoverished country.
They are now operating under a temporary budget and are due to meet again next week.
"The Mongolian government and the investor both highlight the importance that the production should start on time," Dorjsuren Javkhlanbold, a senior official at Mongolia's mines ministry, told Reuters on the sidelines of a conference.
"We have a joint understanding of what we are going to do. We need to make several clarifications (to) our investment agreement and we are confident the revision will soon be successful."
Mongolia signed an agreement in 2009 with Rio Tinto and Oyu Tolgoi owner Ivanhoe Mines, now named Turquoise Hill Resources (NYSE: TRQ - news) .
Under the deal, Mongolia received a 34% stake in the project will be able increase its interest to 50% after the first 30 years of operation.
However, politicians have called on the government to amend the deal over concerns about rising costs impacting its share of profits from the mine.
Rio is the largest single investor in Mongolia. It has already delayed a feasibility study on the second phase of the project, which may cost about $7.0bn, according to analyst estimates.
Shares climbed 1.15% to 3,349p at 10:38 Friday.