Mongolia, making progress in a dispute with Rio Tinto Group (RIO) that has stalled the expansion of a copper mine, understands that it needs to make the nation more welcoming to foreign investors, Prime Minister Norovyn Altankhuyag said.

The country is open to all foreign companies and will allow them to invest in industries such as railways and power stations, in addition to mining, Altankhuyag said in an interview in Beijing during a five-day visit to China.

This month Mongolia’s parliament approved a law that ended different rules for domestic and foreign non-state investors after the Mongolian tugrik fell 21 percent against the dollar this year and foreign direct investment slumped by 47 percent.

 “We have received and agreed with all of the criticism from the market,” Altankhuyag said. “Our investors are cheering the passing of the investment law.”

Mongolia’s mineral boom has slowed amid a protracted dispute with key investors, including Rio, and increasing calls for a greater share of revenue to go to its citizens. Building infrastructure will allow the landlocked country to export a greater volume of its abundant natural resources after low commodity prices hurt its $10 billion economy, Altankhuyag said.

Gross domestic product increased 11.3 percent in the first half of the year, from 12.4 percent for all of 2012 and a record 17.5 percent in 2011. GDP growth will be 13 percent to 14 percent by the end of this year as the government expands domestic construction and boosts the housing market, he said.

“This year is a special one because most of the market prices of our export products are declining right now,” Altankhuyag said.

A 15 percent drop in coal prices this year eroded earnings from Mongolia’s biggest export by 45 percent over the first nine months. The country is prioritizing the volume of coal exports to China, its biggest customer, rather than the price, as well as expanding the infrastructure of the Tavan Tolgoi coal mine, Altankhuyag said.

Low prices will also keep the country from seeking an initial public offering for state-owned coal company Erdenes Tavan Tolgoi LLC, according to the premier.

“If the price will be like this, there is no need to talk about the IPO,” he said. “After we have done the infrastructure we will get a higher price from the IPO.”

Oyu Tolgoi

Tavan Tolgoi and Oyu Tolgoi are two of Mongolia’s largest mines. Mongolia and London-based Rio have been in talks for much of this year over the terms of a financing package, valued at about $4 billion, to develop the second stage of the Oyu Tolgoi copper and gold mine.

Rio, the world’s second-biggest mining company by market value, manages the venture through its 51 percent stake in Vancouver-based Turquoise Hill Resources Ltd. (TRQ), which owns 66 percent of the mine. Mongolia owns 34 percent of Oyu Tolgoi LLC.

Half the issues that need to be resolved have already been decided, Altankhuyag said, and the government is ready to discuss the refinancing. While open-pit work continues, the dispute has resulted in the layoff of about 1,700 workers connected to the mine’s expansion, which includes underground development.

“There is nothing related with the government of Mongolia that is stopping the project,” he said. “We don’t see that there are tough issues to be solved.”

Tolerant, Cooperative

Disagreements over water use, concentrate transportation, exports to China and company management are closer to resolution, Davaadorj Ganbold, one of three Mongolian nationals on the Oyu Tolgoi board, said in an interview in the capital Ulaanbaatar on Oct. 26.

“Both sides are being very tolerant and cooperative towards each other,” said Ganbold, who was deputy prime minister from 1990 to 1992. “Solving one thing may bring some movement or success in other items.”

So far $6.6 billion has been sunk into the first stage of the mine, where the open pit went into commercial production in July.

Altankhuyag met with Chinese President Xi Jinping and Premier Li Keqiang in Beijing after visiting the northeastern province of Liaoning, which borders North Korea and hosts the port of Dalian.

The two sides signed agreements to strengthen cooperation in energy, education, culture and finance, officials said Oct. 25. They’ll also cooperate more closely on mining, Liu Zhenmin, China’s vice minister of foreign affairs, told reporters at the Great Hall of the People after the signing ceremony.

Mongolia’s southern neighbor takes 86 percent of its exports. In the first nine months of 2013, shipments to China totaled $2.66 billion, compared with $3.01 billion a year earlier. In September Mongolia’s central bank said it was in talks with the People’s Bank of China to double the currency swap agreement between the nations to 20 billion yuan ($3.3 billion).