A woman stands next to a group of goats gathered near a metal cattle fence in a dry open field.

The Government of Mongolia and Rio Tinto have agreed to amend the agreement governing relations between the shareholders of the Oyu Tolgoi project. The changes are expected to reduce project costs and increase Mongolia’s future returns.

Prime Minister N. Uchral and Rio Tinto Chief Executive Simon Trott jointly announced the agreement in Ulaanbaatar on September 11. It marks one of the most significant changes to the Oyu Tolgoi agreement since the original arrangements were signed 17 years ago. The Oyu Tolgoi Investment Agreement was signed in 2009, followed by the revised Shareholders’ Agreement in 2011.

According to the Government of Mongolia’s estimates, the revised arrangements could reduce Oyu Tolgoi’s total costs by approximately MNT 30 trillion, or US$8.4 billion. At the same time, Mongolia’s total returns over the life of the project are expected to increase by approximately MNT 13 trillion, or US$4 billion, the government said. This is not a one-off cash payment to Mongolia, but an estimate of the returns it is expected to receive in the future.

The cost reduction is expected to result from measures including lower management service fees, the removal of duplicate costs and a reduction in interest on shareholder loans extended to Oyu Tolgoi. According to the Mongolian side, approximately MNT 8 trillion of the estimated savings is related to management costs, while MNT 22 trillion is linked to interest expenses.

However, the timing of Mongolia’s first dividend payments from Oyu Tolgoi remains a key issue. Under an earlier agreement reached by the parties on June 30, they committed to working together to bring forward the timeline for dividend distributions. At the time, the government said Mongolia could begin receiving dividends in 2026. Under the new agreement reached in September, however, the parties agreed to work toward beginning dividend distributions in 2027.