Rio Tinto reaches power supply deal with Mongolia for Oyu Tolgoi mine

(Reuters) - Rio Tinto Ltd <RIO.AX> said on Monday it had reached an agreement with Mongolia to domestically supply power to its Oyu Tolgoi copper-gold mine through a state-owned coal-fired power plant at Tavan Tolgoi.

The Mongolian state owns 34% in the Oyu Tolgoi project, while Rio's majority-owned Turquoise Hill Resources <TRQ.TO> has a 66% stake in the project.

The mining giant said in a statement it will amend its current power supply agreement with Mongolian government by March 2021, under which the government will begin construction of the coal-fired power plant by July 2021.

The plant, being built to supply power to the Oyu Tolgoi project, is expected to be commissioned within the next four years, the global miner said.

Until the commissioning of the state-owned plant, power supply to the mine and the underground project will continue under the current terms, it said.

Rio had in March flagged slowing down of operations at the Mongolian mine due to coronavirus restrictions.

(Reporting by Sameer Manekar in Bengaluru; Editing by Kenneth Maxwell)