Shearman & Sterling represented Erdenes Oyu Tolgoi LLC, a Mongolian state-owned company, in its complex negotiations with Rio Tinto with regard to the massive Oyu Tolgoi mining project in Mongolia.
Oyu Tolgoi is one of the world's largest copper-gold mines, located in the South Gobi region of Mongolia. It is being developed as a joint venture between the Government of Mongolia with 34% ownership and Rio Tinto's Turquoise Hill Resources division with 66% ownership. Approximately US$6 billion has already been invested into the project.
On Monday the Prime Minister signed an “Oyu Tolgoi Underground Mine Development and Financing Plan” along with Erdenes Oyu Tolgoi LLC, Turquoise Hill Resources and Rio Tinto to clear the way for the development of the underground mine at Oyu Tolgoi. Market expectations are that this will have a significantly positive impact on Mongolia's economic prospects as it will clear away a major concern for international investors.
The Oyu Tolgoi mining project comprises an open pit mine, which has been operational since 2013, and an underground mine to be developed. Once fully operational, it is expected to account for approximately 40% of Mongolia's gross domestic product.
The core Shearman & Sterling team included partner Matthew Bersani (Hong Kong-Capital Markets) and associates Emmanuel Jacomy (Singapore-International Arbitration) and Crystal Chen (Hong Kong/Shanghai-Project Development & Finance).