AKIPRESS.COM - Rio Tinto will have to contend with a new government in Mongolia after the leader who last year approved an expansion of the company's Oyu Tolgoi copper mine was emphatically ousted from power, reports WA Today.
Faced with a spluttering economy, Mongolian Prime Minister Chimediin Saikhanbileg lost his own electorate while his ruling party was reported to have lost 28 of their 37 seats.
Just 13 months ago Saikhanbileg signed a mine expansion agreement for Oyu Tolgoi which ended an impasse that had lasted more than three years.
The Rio board confirmed last month that the $US5.3 billion expansion would go ahead.
The Mongolian People's Party (MPP), which ruled the nation between 1921 and 1990, will assume power after reportedly winning 65 of Mongolia's 76 electorates.
While some members of MPP have called for Mongolia to get a better share of Oyu Tolgoi's wealth, the party was in power when Rio signed the original "investment agreement" for Oyu Tolgoi in 2009.
Views were mixed over whether Rio would be better or worse off under the new government.
Brian Fisher, a former adviser to Oyu Tolgoi and now the director of Canberra-based BAE Economics, said he did not believe Rio had much to fear from the new government.
"Their general approach has been fact based, so there is economic rationality," he said. "On balance the outcome is possibly in Rio's favor."
Nick Cousyn, the chief operating officer of Mongolia's largest brokerage, BDsec JSC, said the election had seen the defeat of two parliamentarians who had been critical of Mongolia's deal with Rio.
"The most interesting part of the election was the defeat of two extreme, but very popular Resource Nationalist MPs, Ganbaatar and Uyanga," he said. "Their resource nationalist platform was strongly rejected by voters; big change in mindset."
The change of government in Mongolia, which houses Rio Tinto's most important growth project, comes ahead of Saturday's election in Australia, where the majority of Rio's profits are made.
It also comes barely a week after Britain, where Rio's headquarters are located, voted to leave the European Union.