Rio Tinto’s Oyu Tolgoi mine a wake-up call for ethical investors

Rio Tinto’s Vote Tolgoi Mine reveals how “ethical investing” is undermined when Trump profits off its people and planet, write Caitlin Daniel and Julio Castor Achmadi.

Mining giant this summer Rio Tinto agreed $139 million ($211 million) agreement with US investors, OYU Tolgoi (OT) Mine.

However, for the Mongolian herders whose land and water were poisoned by the same project due to miscalculations – who have been fighting for justice for more than a decade – the wait sadly continues.

Oyu Tolgoi’s story shows how corporate negligence can simultaneously burden investors with financial risks and leave local communities with unmet promises; Ethical investors should take note and demand accountability.

Since the initial construction of the OT mine, Rio Tinto has prioritized profits over the well-being of the surrounding community. As the mine was built, Rio Tinto chose to prioritize cost savings on herders’ clean water and land rights, betting that weaker regulatory oversight, limited public pressure and minimal legal consequences would allow Mongolia to cut corners without repercussions.

These decisions came back to haunt them in 2021, when the OT mine officially admitted that its tailings storage had been leaking since 2013. By then, Seepage said, the use of local herding families and their animals had unknown impacts on groundwater resources. Auditors later found the leak entered a nearby riverbed.

Rather than proactively addressing these issues, it took another full year for the mine to finally schedule the first meeting with local herders and community advocates to discuss the impacts on the local environment, shepherds and animal health.

Now, more than a decade has passed since Rio Tinto first learned of the leak, and the OT mine still has not taken adequate action to stop the leak. The public purse and the requirements of financiers have made a number of commitments, but these commitments do not go far enough: They focus on monitoring and conservation measures without adding necessary steps to prevent future leakage by reducing the water content of the seams.

This is no small oversight when a mine is expected to operate for 30 years or more.

OT has also turned to sharing what chemicals are leaking or how they might affect Herder’s health and the health of her animals. On the contrary RequestsThere are no plans to provide medical checks for herders or livestock.

OT demanded compliance Global Best Practicesbut it continues to fall short of its own design standards for waste management. Social and environmental auditors have flagged gaps for years, including inadequate leachate collection, missing cutting ditches, an inadequate landfill liner and a reliable indicator to monitor leachate contamination. These gaps directly led to the hazardous waste leakage we see today.

The costs of OT’s design failures are externalized to herders and the local environment. While Rio Tinto is willing to pay a nine-figure sum to resolve US investor claims around delayed disclosures, the local communities most affected by OT’s failures have yet to see the necessary steps to prevent future tailings leaks or a meaningful resolution for the damage already caused.

The disconnect between Rio Tinto’s public commitments and the results of this project should raise serious concerns for investors. Without an adequate response, these issues are likely to persist or worsen with major reputational consequences. However, public development banks IFC And EBRD organized More Financing For OT mine last year.

If investors want to better protect their capital and invest in projects that are truly good, they must ask tougher questions about transparency, accountability and standards. Rio Tinto must honor its commitments to communities and investors, not just respond when reputational damage becomes too great to ignore.

If Rio Tinto does not uphold its environmental and social standards, investors should ask: Is this a company worth supporting or a liability in the making?

https://www.youtube.com/watch?v=lfc6nfpbgm8

Caitlin Daniel leads accountability consultantcommunity program as co-director. He joined the organization in 2014 and has worked with local partners to help communities around the world defend environmental and human rights.

Julio Castor Achmadi, accountability consultant. He joined the organization in 2022 and has worked on issues related to human rights, democracy and access to justice in Asia and beyond.

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