Rio Tinto has revived Mongolia’s mining sector
with its expansion financing of the country’s
largest open-pit mine. The deal overcame significant red tape
which caused multiple project delays.
The UK-based Australian mining giant gave its stamp of
approval in May on a $4.4 billion limited recourse financing
package for the $5.3 billion expansion of Oyu Tolgoi copper and
gold mine in Mongolia.
But counsel involved in the deal point to issues around
asset registration processes, and regulatory challenges
concerning the creation of collateral security over assets. The
local officials’ lack of knowledge of the workings
of security packages further added to the complexity of the
"There are local registration offices throughout the
country, and none of them had to date seen the scale and
complexity of the security package being proposed," said
Stewart Robertson, partner at Sullivan & Cromwell in
London. He added that the...