Mongolian government to build coal-fired plant for Rio Tinto’s copper mine
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Combustion Industry News Editor
Mining giant Rio Tinto has avoided having to build a power plant for its copper mining project in the Gobi Desert in Mongolia, as the Financial Times reports. Instead, the Mongolian government will build the US$1 billion (€890 million) coal-fired plant, in what analysts Canaccord Genuity describe as a smart move for Mongolia. Credit is cheap at the moment, and owning the power plant will give the Mongolian government leverage over the US$6.8 billion (€6.05 billion) mine. It might also be seen as a benefit to Rio Tinto, too, in avoiding the outlay for the plant itself, and perhaps mitigating some risk in the project, although it will of course mean that the mine will be subject to electricity price pressure from the power plant. However, such pressure was an unavoidable element of the mining project, as if Rio had built the power plant, it would then have been subject to coal price pressure from the government-owned coal mine.