RIO TINTO insists ancient Mongolian-Chinese rivalry is not contributing to delays on a crucial power link for its most important growth project.

Negotiations to supply Chinese electricity across the Mongolian border to help run Rio”s massive Oyu Tolgoi copper and gold mine have been under way for more than a year, and are still incomplete despite first production from the project expected in coming weeks.

The power link is needed if Rio is to achieve commercial production from the project in the first half of next year, and fears of a international stoush have grown as the impasse has continued.

But Rio”s head of copper, Andrew Harding, said the impasse was entirely commercial. “”I can guarantee there is nothing of a geopolitical nature that is actually infiltrating itself into the negotiations … it is absolutely about the commercial terms in the contract,”” he said.

Rio is currently dominated by its iron ore business, which supplies about 80 per cent of the company”s revenue.

Despite the sector taking a beating in recent months on the back of a stunning price slump, its chief executive, Tom Albanese, said he had no concerns about the bias. “”I”m regularly asked if we are truly a diversified company with such a heavy weighting in iron ore … we are realistic about the weighting but at the same time I will never be apologetic about our iron ore business, nor do I intend to subsidise non-iron ore investments to force a balance,”” he said.

Mr Albanese said iron ore”s quick rebound to test $US118 a tonne yesterday was a sign the market was working well.

In a swipe at BHP Billiton and Fortescue, Mr Albanese said recent decisions to defer “”marginal projects”” would benefit Rio”s position in the market.