- An expert group reviewing the cause of a $1.4 billion cost overrun at a Mongolian mine run by Rio Tinto said it was caused by the miner's mismanagement, The Wall Street Journal reported on Monday, citing a report.
Costs to expand the Oyu Tolgoi mine, Turquoise Hill's biggest copper growth project, have ballooned into $6.75 billion from Rio's original budget of $5.3 billion in 2016, which has led to a friction over funding with Rio.
Oyu Tolgoi, in which Rio owns a 50.8% stake, owns 66% of Turquoise Hill, one of the world's largest copper and gold deposits. The rest is held by the Mongolian government.
The report, commissioned by the owners of the copper project, said the cost overrun was not due to unfavorable rock conditions as reported by the one of world's largest miner.
This confidential report will be considered by the OT Board and Rio Tinto will engage with the OT Board as soon as we have had the opportunity to review the report in detail, Rio Tinto said in an emailed statement.
According to the report, there was no evidence that the mineral rock and general conditions were significantly different from the forecast by the mine owners in 2016.
The WSJ report said the British regulators and U.S. Securities and Exchange Commission were investigating the matter.