Oyu Tolgoi delays JV mining as Rio Tinto accelerates Panel 2 South development
Rio Tinto delays mining in the Entrée joint venture area at Oyu Tolgoi and accelerates Panel 2 South development. Find out what this means for copper output.
Oyu Tolgoi LLC, the operator of one of the world’s most significant copper-gold underground mines, has announced a major shift in its near-term development plan. The Board of Directors has approved a pause in mining activity within the Entrée Resources joint venture (JV) area of Panel 1 due to delays in licence transfers from the Government of Mongolia. Instead, development work will be redirected to Panel 2 South—an area fully under Oyu Tolgoi’s control—without altering Rio Tinto Group’s (NYSE: RIO) 2025 consolidated copper guidance of 780,000 to 850,000 tonnes.
Jointly owned by Rio Tinto (66 percent) and the Government of Mongolia (34 percent), Oyu Tolgoi LLC is progressing the underground expansion in stages, with long-term production targets reaffirmed despite ongoing licensing hurdles.

Why mining in the Entrée joint venture area is on hold
The Entrée Resources joint venture covers a portion of Panel 1 and was expected to contribute to copper output from 2027. However, necessary licence transfers from Entrée Resources to Oyu Tolgoi LLC remain unresolved. With only preliminary lateral development work underway in the joint venture section, Rio Tinto has opted to preserve flexibility by redeploying resources to Panel 2 South.
This strategic shift ensures continued ramp-up momentum while awaiting regulatory clearance. Limited development will continue in the non-joint-venture zones of Panel 1, but primary emphasis is now placed on accelerating access to ore in Panel 2 South.
What are the new copper production targets at Oyu Tolgoi?
Rio Tinto has maintained its 2025 copper production guidance of 780,000 to 850,000 tonnes, despite the pause in Panel 1’s joint venture area. Long-term output from Oyu Tolgoi is projected to average 500,000 tonnes per annum from 2028 through 2036. According to Rio Tinto Copper Chief Executive Katie Jackson, the cave system is performing above expectations, giving the mining group confidence to adapt its sequencing strategy while preserving its development optionality.
Jackson noted that shifting to Panel 2 South at this early juncture—when Panel 1’s lateral development is just beginning—ensures value delivery is optimized across the project.
How does the Oyu Tolgoi mine fit into Rio Tinto’s global copper strategy?
Oyu Tolgoi remains a critical pillar of Rio Tinto’s long-term copper strategy, especially as global demand for the metal intensifies amid the accelerating energy transition. With decarbonization driving demand from sectors such as renewable energy, electric vehicles, and grid infrastructure, copper has become a strategic priority for diversified miners—and Oyu Tolgoi is among the few assets globally with the scale, grade, and long-life potential to anchor a multinational copper supply strategy.
Located in the South Gobi region of Mongolia, Oyu Tolgoi is one of the world’s largest known copper-gold deposits, with an expected multi-decade production horizon. The underground expansion currently underway is designed to unlock deeper ore bodies at significantly higher copper grades than the existing open pit, positioning the project to deliver low-cost, high-margin output at a time when high-grade discoveries are increasingly rare.
The structural design of the mine provides a key strategic advantage. Rio Tinto’s ability to dynamically pivot between development zones—such as Panels 1, 2, and 2 South—based on regulatory clearance, ore body characteristics, and sequencing priorities allows for operational continuity even when facing jurisdictional challenges. The decision to pause activity in the Entrée Resources joint venture area and accelerate work in Panel 2 South is a prime example of the built-in optionality that makes Oyu Tolgoi a resilient cornerstone of Rio Tinto’s production base.
Beyond Mongolia, Rio Tinto is also advancing other key copper assets including the Resolution Copper project in Arizona, which, if approved, could become one of the largest copper producers in North America. In Latin America, the miner continues to hold strategic positions in Chile and Peru—two of the world’s most copper-rich regions. These projects, combined with Oyu Tolgoi, form a diversified copper portfolio across geographies and regulatory environments, balancing frontier opportunities with mature market developments.
Rio Tinto’s broader copper ambition is also aligned with global ESG priorities. With mounting investor scrutiny on the sustainability of supply chains, Oyu Tolgoi’s scale and projected low carbon intensity are expected to enhance its appeal to major end-users and governments alike. The mine’s development is being closely monitored by clean energy stakeholders and infrastructure OEMs seeking secure, long-term access to copper in a geopolitically diverse framework.
Institutionally, analysts view Oyu Tolgoi not only as a production asset but also as a flagship for Rio Tinto’s post-iron-ore evolution. While iron ore remains its largest revenue generator, Rio Tinto’s future growth in value—and possibly in market multiple—is expected to hinge increasingly on copper and battery metal exposure. The success of the Oyu Tolgoi ramp-up, and its ability to navigate complex trilateral dynamics involving the Mongolian government and Entrée Resources, is seen as a test case for Rio Tinto’s future positioning in resource diplomacy and stakeholder alignment.
In sum, Oyu Tolgoi’s importance extends far beyond its near-term production numbers. It exemplifies Rio Tinto’s approach to long-life, high-value asset development in strategic commodities, and its execution in Mongolia will influence how investors and governments view its credibility in managing high-stakes copper projects across emerging and frontier markets.
What is the latest sentiment on Rio Tinto stock (NYSE: RIO)?
As of June 10, 2025, Rio Tinto shares are trading at USD 59.31, close to the lower end of their 52-week range (USD 51.67–72.08). The price action remains subdued amid macroeconomic headwinds and project-specific regulatory delays. Despite this, analysts maintain a “Moderate Buy” consensus, with an average 12-month price target of USD 73, indicating a potential upside of over 20 percent.
Key valuation metrics reinforce Rio Tinto’s investment appeal: a price-to-earnings ratio of ~9.2 and a dividend yield of around 7.6 percent, backed by a payout ratio of 66–69 percent. For income-focused investors, these fundamentals make the miner attractive even as near-term operational risks persist.
What are institutions doing with Rio Tinto shares in 2025?
Institutional ownership in Rio Tinto stands at approximately 49 percent. Recent 13F filings show mixed sentiment. Gateway Investment Partners trimmed its holdings by roughly 29 percent, possibly reflecting short-term caution around licence uncertainties. However, long-term confidence remains visible: Charles Schwab, Schroder Investment, Capital Analysts, and Norges Bank all increased or initiated positions during the same period.
Retail sentiment, tracked via platforms like TipRanks, currently trends negative—likely a reaction to project-specific delays and ongoing regulatory headlines. Nonetheless, multiple analysts at Barclays, JP Morgan, and DZ Bank have issued “Buy” or “Overweight” ratings, reinforcing the view that Rio Tinto’s long-term value remains intact.
What are the key risks to Rio Tinto’s copper expansion?
The primary operational risk remains the unresolved licence transfer from Entrée Resources to Oyu Tolgoi LLC, which affects the sequencing of Panel 1. In addition, Rio Tinto is preparing for an executive leadership transition, with CEO Jakob Stausholm set to step down later in 2025. Such transitions can sometimes impact strategy continuity at the senior level.
Further risks include potential legal disputes in Mongolia, particularly relating to tax matters and previous investment agreements. Rio Tinto also faces investor scrutiny over cost reviews of other critical projects, including the Jadar lithium development in Serbia. Nonetheless, the group’s geographic and commodity diversification buffers against single-project volatility.
Is Rio Tinto still a buy amid development delays?
Despite the temporary pause in joint venture mining, Rio Tinto’s investment case remains fundamentally strong. The miner’s diversified copper pipeline, high-margin iron ore operations, and stable dividend profile provide insulation from regional regulatory delays. For long-term investors seeking copper exposure amid the global energy transition, the stock offers both value and yield.
Analysts consider the current weakness in price as a potential entry point, especially as operational flexibility at Oyu Tolgoi mitigates risk. Should Mongolia finalize the licence transfer process in the coming quarters, the market could respond positively, accelerating upside momentum.
What happens next for Oyu Tolgoi and licence negotiations?
Engagement continues between Rio Tinto, Entrée Resources, and the Government of Mongolia to resolve the licence transfer issue. A successful conclusion would enable mining activity to resume in the joint venture area of Panel 1, likely boosting production capacity and unlocking further value.
Until that happens, Rio Tinto’s decision to bring forward development in Panel 2 South keeps the broader underground expansion on schedule. The mine’s ramp-up remains vital not only to Rio Tinto’s copper portfolio but also to Mongolia’s economy, which benefits from employment, royalties, and foreign investment through the project.
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