Download Regional Economic Development in Mongolia and the Oyu Tolgoi

Regional Economic Development in Mongolia and the Oyu
Tolgoi Project.
David Paterson
Director, Emergent Advisory Pty Ltd
Former Vice President - Regional Economic Development and Communications, Oyu Tolgoi LLC
Introduction
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Greeting
I spent 25 years with Rio Tinto, with my most recent position being the
VP Regional Development and Communications at the Oyu Tolgoi project
in Mongolia.
Mongolia and Rio Tinto
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The Oyu Tolgoi is a massive project and having a dramatic impact on the
Mongolian economy.
When it reaches peak production in 2017 it will be one of the worlds
largest copper and gold mines.
Capital expenditure for Phase 1 is $6 billion. Mongolia’s GDP in 2009 was
about US$5 billion. By 2017 the project will represent about 30% of GDP.
Equity partnership with the Mongolian Government (Turquoise Hill
Resources 66%, Govt of Mongolia 34%).
A text book case of a mining project that has potential to drive economic
growth, but also the risks of the resources curse.
Why Mongolia is important to Rio Tinto
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Success in developing OT from a social perspective will build Rio’s
reputation as a development partner
Much of Rio’s project pipeline is in developing countries
Social licence to operate is identifiable and real
There is no road map for building socially successful mining projects.
Innovation and experimentation essential.
Increasing focus on social performance.
Regional economic development
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Key areas are employment, procurement and local infrastructure (eg
power, water, roads, airport)
South Gobi Regional Development Council: mandated under the
Investment Agreement, provides a tri-partite forum for addressing
development issuesTackling issues of social concern, eg public health,
HIV/AIDS
Khan Bogd
o A key focus for Oyu Tolgoi
o The closest town to the mine
o Focus for company workforce in the future
o Potential for engagement with multi lateral donors, aid sector,
government and local businesses.