Aluminum
Corporation of China, or Chinalco, is negotiating with Mongolia about its
participation in the Oyu Tolgoi project. 
According to a Chinese website (China.org.cn)  if a labor contract is signed successfully,
about 2,600 Chinese workers are expected to work for the project.  This would be a booster for the final
decision on Chinalco”s participation, expected to be taken earliest in July.

Chinalco”s
president Xiong Weiping expressed in March this year the company”s willingness
to co-develop the Oyu Tolgoi mine, located 200 kilometers away from the border
of the two countries. Chinalco has strong advantages in participating in this
mine”s exploration. Located in the interior land, the mine depends largely on
the infrastructure of China for the export of its products, and China is the
only large country with mineral import around Mongolia.

An insider
has said that China Investment Corporation (CIC) plays an important role in the
possible cooperation. Oyu Tolgoi is owned by Ivanhoe Mines Ltd. of Canada, whose
equity stake is held by Rio Tinto. CIC owns the right to appoint board members
and the pre-emption rights of SouthGobi Energy Resources Ltd., a subsidy of
Ivanhoe. This means that if Ivanhoe transfers the share of SouthGobi in the
future, CIC will have priority right to buy it.

“If
necessary, CIC could talk directly to Ivanhoe,” the insider said. CIC has also
been “negotiating with potential partners” including Rio Tinto, Xiong has
said.