The Mongolian government has told Rio and its Turquoise Hill subsidiary that owns 66% of the project that it plans to build a state-owned coal-fired power station that would provide a long-awaited domestic power source for the mine.
The surprise move has both short-term and long-term ramifications for Rio and Turquoise Hill, as a government-funded power station would reduce Rio and Turquoise Hill's near-term spending on the project but also give the government a long-term source of leverage over the mine project.
Turquoise Hill says it is broadly supportive of the government-owned proposal, subject to further agreement over the commercial terms for the supply of power and construction timelines.
