Rio faces taxing times in Mongolia

RIO Tinto’s December quarter production report detailed a solid performance across all of the group’s major commodities, writes Barry FitzGerald.

Rio faces taxing times in Mongolia Rio faces taxing times in Mongolia Rio faces taxing times in Mongolia Rio faces taxing times in Mongolia Rio faces taxing times in Mongolia

But the report was marred by the disclosure that the Mongolian government was chasing an additional US$155 million in taxes from the Oyu Tolgoi copper-gold mine.

The local market seemed to care less about dirt-poor Mongolia’s latest grab for a bigger share of OT’s riches, judging by Rio’s share price performance on Tuesday (down 0.66%) compared with that of its old rival, BHP (down 0.75%).

But maybe the market should have cared more. While the contested amount is nothing in the scheme of things, and contested tax is a feature of doing business in all jurisdictions, the tax grab confirms fears that it is in Mongolia’s DNA to continually seek greater returns from its mineral wealth.

The country, w...