East Asia & the Pacific
Mongolia / Oyu Tolgoi-01/Southern Gobi
The Oyu Tolgoi project is a $12 billion investment to develop a copper and gold mine at Oyu Tolgoi in the Southern Gobi region, Mongolia. Oyu Tolgoi LLC's majority owner (66%) is Turquoise Hills Resources, a Canadian public company listed on the Toronto Stock Exchange. Erdenes Oyu Tolgoi, LLC, a Mongolian state-owned holding company, owns the remaining 34%. Turquoise Hills Resources majority shareholder is international mining major Rio Tinto Plc. IFC’s proposed investment is a A Loan for IFC's account of up to US$400 million together with a B Loan of up to $1 billion to be syndicated to international commercial banks, as part of a proposed $4.5 billion project debt financing. In addition to the proposed IFC financing, MIGA is providing a guarantee against the risks of expropriation, war and civil disturbance, and breach of contract. for a parallel debt tranche of up to US$1 billion.
In October 2012, a complaint was filed by nomadic herders, with the support of OT Watch, a national NGO, and Gobi Soil, a local NGO, on behalf of nomadic herders who reside and/or raise livestock close to the project site. The complainants’ main concern is the project’s use of land and water, which they claim disrupts their nomadic way of life, and puts in jeopardy their indigenous culture and livelihood. The complainants contend they have not been compensated or relocated appropriately, and question the project’s due diligence, particularly around the issue of sustainable use of water in an arid area.
The CAO found the complaint eligible for further assessment in October 2012 and conducted multiple field trips to Mongolia between November 2012 and February 2013. Based on stakeholder discussions conducted as part of the CAO Assessment, the complainants and company have agreed to work with CAO's Dispute Resolution function to try to resolve the issues raised in the complaint using a collaborative approach. The assessment process is documented in CAO's Assessment Report, which is available, along with IFC's response, under "View Documents" below.
CAO's Dispute Resolution process is underway and the team is working with the parties to help them make informed decisions regarding how they will work together through the CAO process.
Status as of August 12, 2014
- IFC & MIGA
- Project Name & Number
- Oyu Tolgoi LLC 29007
- Oil, Gas, Mining, & Chemicals
- OT LLC
- East Asia & the Pacific
- Environmental Category
- $400m A loan & $1b B loan
- Eligible: Completed
- Assessment Period: Completed
- Facilitating Settlement: In Process