Mongolian government has delayed approval to invest U.S. $ 6.8 committed to developing exploration projects of copper-gold mining Oyu Tolgoi. Mongolian government refusal to open the opportunity for Rio Tinto and Chinalco to resume reconciliation talks the two mining companies.

Asia minerals industry analyst Mike Komesaroff said Rio and Chinalco were not finished, despite Rio’s rejection of Chinalco’s $23bn bid four months ago.

“There are still good deals to be made by both,” he said.

“They can learn from the past and move on, for the benefit of all stakeholders.”

Mr Komesaroff worked for Rio for 20 years, including a stint as president of its Japan unit, and has also worked for the China National Non-ferrous Metals Corp.

He said mining provided 28 per cent of the gross domestic product and 69 per cent of the export earnings of land-locked Mongolia, which needed China as its market and for access to ports.

But Mongolians remained wary of the size and power of China, which colonised it for centuries before the Soviet Union seized the country in 1921.

Mr Komesaroff said it would be more palatable for the Chinese to come in behind Rio if and when Canadian explorer Ivanhoe Mines sold some of its 66 per cent stake in Oyu Tolgoi.

Rio’s present involvement is indirect, via its 10 per cent stake in Ivanhoe, a company run by colourful Canadian Robert Friedland.

But it will end up as the operator of the mine, and through an increased shareholding in Ivanhoe it would be in a strong position to help Chinalco or another Chinese company join the venture.

Mr Komesaroff said Chinalco was Rio’s biggest shareholder and had been nominated as “China’s nonferrous metals champion, with copper at the top of its list”.

Chinalco has acquired a succession of domestic Chinese copper producers, and Peru Copper overseas.

Mr Komesaroff said a change in management at Rio — with new chairman Jan du Plessis succeeding Paul Skinner, who signed off on the ill-fated deal with Chinalco — should make it easier for Chinalco to work with Rio again, especially on such a rich resource.

From its planned start-up in 2013, Oyu Tolgoi is set to produce 450,000 tonnes of copper and 330,000 ounces of gold a year.

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