East Asia & the Pacific
Mongolia / Oyu Tolgoi-02/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 percent) 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 percent. 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 February 2013, a complaint was filed by a local nomadic herders and community members who reside and conduct livelihood activities close to the project site. The complainants’ main concern is the Undai River diversion component of the project. The complainants contend that the river diversion jeopardizes their traditional nomadic lifestyle and livelihood. They are specifically worried that the diversion will lead to several water systems drying up, deteriorated pastureland yields, diminished water supply to forests and a cultural impact to what they view as a sacred river.
The CAO found the complaint eligible for further assessment in 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 and MIGA's response, under "View Documents" below.
Local herders elected a team to represent them in a single dispute resolution process for both CAO Oyu Tolgoi complaints (01 & 02). As part of the process to address this complaint, the parties agreed on a joint fact-finding process (JFF) and jointly selected an Independent Expert Panel (IEP) to assess the impacts of the project on the Undai River and other local and regional water sources. Phase 1 of the JFF process was completed in early 2015 and findings and recommendations can be found via "View Documents" tab. Phase II of the JFF process, focusing on a main tributary to the Undai River, began February 2016 and is currently underway. Details on agreements and joint statements from the parties on the progress of the process so far can be found via "View Documents" link below. CAO's Dispute Resolution process is ongoing.
Status as of March 28, 2016
- 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