Rio Tinto, one of the world’s leading companies in the metal and mining industry, was founded in 1873 on the banks of the Rio Tinto River in Spain. Today it operates in 35 countries. One of the current operations of this plurinational company, which is currently based in England-Australia, is carried out in Mongolia.[1]
Mongolia, which has one of the largest copper and gold reserves in the world, has attracted many significant foreign investors to the region throughout history. The Oyu Tolgoi Mine, located in the Gobi Region of Mongolia, is also an area of operation that is on the agenda of Rio Tinto company. According to the data of Rio Tinto company, in the Oyu Tolgoi Project, the Government of Mongolia 34%; the company owns 66% of the shares.[2]
The mining activity of the open pit in Oyu Tolgoi started in 2011. In addition, the aforementioned region is of critical importance as it is the largest industrial complex ever built in Mongolia. Oyu Tolgoi will be thought to be the fourth-largest copper mine in the world when fully operational. It is seen as an important development that the Rio Tinto board and the Mongolia Government approved the start of underground works in January 2022 and that the mining began in 2023.[3] So, what effect did the Russia-Ukraine War have on the project in question?
After the war started with the decision of Russian President Vladimir Putin on February 24, 2022, Western states started to impose sanctions on Moscow in a while. Rio Tinto has become the first major mining company to announce that the West has decided to cut off relations with Russian companies on March 10, 2022, after the sanction step.[4] Therefore, the company in question has entered the process of evaluating alternative fuel sources for the Oyu Tolgoi Mine in Mongolia. But while the company is looking for alternative fuel sources; it also stated that the energy supply from Russia could not be completely stopped.[5] Because Mongolia borders only Russia and China. The fact that the country is surrounded by these two states does not leave much choice for foreign investors in supplying the projects.
Hence, Rio Tinto President Bold Baatar, referring to Russia and China, said that Mongolia has two big and powerful neighbors and stated that it is important to maintain peaceful and balanced relations with these countries.[6] For this reason, it has been seen that the decision to cut off connections with Russian companies, which was taken in the first place, was just a word.
Mongolia, which is between two great powers such as Russia and China; acts in line with this reality in foreign policy, economy, and trade. The anxiety about Mongolia’s sovereignty and independence being damaged and becoming a satellite of any state can be seen as the main reason for the balance policy it follows. The most concrete example of this comes to light with the “Oyu Tolgoi Operation” of the Rio Tinto company. In other words, the regional and geopolitical reality is not only the Ulan Bator Government’s; it can be said that foreign investors also affect their policies. That is to say, the Russia-Ukraine War did not change the balance policy applied by Mongolia for years.
As can be understood, after Russia’s war on Ukraine, it was expected that the balance in the energy field would change. The most prominent issue in the sanctions decisions of the West against Russia was energy. The imposition of sanctions on Russia during the process did not apply to the operation of the Rio Tinto company in Mongolia. Being aware of the fact that Mongolia could not close its borders to Russia, Rio Tinto company seemed to react against Moscow by reacting to the Russia-Ukraine War, but this situation was short-lived.
As a result, the company continues its relations with Russian companies by acting in accordance with the policy of the Ulan Bator government under the influence of geopolitical realities and limited opportunities. For this reason, it is seen that the policy adopted by Rio Tinto at the beginning of the war has changed and in this regard, the Russia-Ukraine War doesn’t have a negative effect on Rio Tinto’s energy supply to the “Oyu Tolgoi Operation” in Mongolia.
[1] “South Gobi, Mongolia”, Rio Tinto, https://www.riotinto.com/en/about, (Date of Accession: 23.03.2023).
[2] “Oyu Tolgoi”, Rio Tinto, https://www.riotinto.com/en/operations/mongolia/oyu-tolgoi, (Date of Accession: 23.03.2023).
[3] Ibid.
[4] “Rio Tinto Cuts Ties with Russian Businesses over Ukraine War”, Mining.com, https://www.mining.com/rio-tinto-cuts-ties-with-russian-businesses-over-ukraine-war/, (Date of Accession: 23.03.2023).
[5] “Rio Tinto to Cut Ties with Russian Firms Over Ukraine Crisis”, Mining Technology, https://www.mining-technology.com/news/rio-tinto-ties-russia/, (Date of Accession: 23.03.2023).
[6] “Rio Tinto Says Mongolia Mine Can’t Halt All Russian Imports”, Asia Financial, https://www.asiafinancial.com/rio-tinto-doubts-mongolia-mine-can-bypass-russian-oil, (Date of Accession: 23.03.2023).
