Oyu Tolgoi LLC faces significant unpaid water fees following multiple government directives. The company owes MNT 4.8 billion from an official National Audit Office directive. This directive resulted from a claim by the General Department of Taxation. Additionally, the Water Agency of Mongolia assessed MNT 1.5 billion for the first quarter of this year. The company also has unpaid water pollution fees for 2022 through 2025. Consequently, these unpaid water fees have drawn attention from Mongolia’s Ministry of Environment and Climate Change.
Minister Sandag-Ochir Tsend met with Rio Tinto executives on May 8 to discuss the issue. Amarjargal Khenchbish, Country Director of Rio Tinto in Mongolia, attended the meeting. Munkhsukh Sukhbaatar, Chief Executive Officer of Oyu Tolgoi LLC, also participated. They discussed the settlement of these unpaid water fees and improvement of land rehabilitation efforts. The parties also talked about cooperation in supporting the upcoming COP17 conference. According to the ministry, both sides agreed to resolve the outstanding issues promptly.
Minister Sandag-Ochir stated that his ministry supports socially responsible mining operations. Such operations must comply with Mongolia’s Constitution and environmental legislation. They should also apply environmentally friendly technologies to reduce harm. Therefore, resolving these unpaid water fees represents an important step toward regulatory compliance. The minister emphasized that public-private cooperation depends heavily on mutual understanding. He welcomed efforts to settle the outstanding water use and pollution fees.
The ongoing unpaid water fees case highlights broader challenges in Mongolia’s mining sector. Oyu Tolgoi is one of the largest copper and gold mines in the world. Rio Tinto operates the mine through a complex investment agreement with the Mongolian government. Nevertheless, environmental compliance and fee payments have remained contentious issues for years. The government has previously threatened to suspend operations over unpaid taxes and fees. Consequently, this meeting signals a commitment to resolve disputes through dialogue rather than confrontation.
Looking ahead, the ministry noted that COP17 participation offers major opportunities for private sector companies. More than 190 UN member states have expressed interest in attending the conference. Companies can access blended financing and establish partnerships with international organizations. They can also gain valuable international experience from the event. Officials emphasized that Rio Tinto and Oyu Tolgoi should support COP17 as major mining operators. They should also set an example for other companies in the sector. By settling the unpaid water fees, Oyu Tolgoi can demonstrate its commitment to responsible mining. The minister expressed hope that similar disputes will be resolved through cooperation in the future. For now, both parties will continue working on implementing their agreements.
