By Rhiannon Hoyle

Rio Tinto PLC said it has reached agreements with Turquoise Hill Resources Ltd. and Mongolia's government on the Oyu Tolgoi copper mine expansion in South Gobi desert that have led the partners to approve the start of underground operations.

Under the agreements, Turquoise Hill will waive a $2.4 billion loan to Mongolia's Erdenes Oyu Tolgoi, while Rio Tinto and Turquoise Hill have also promised improved cooperation with the state-owned company on the copper-mining operation, Rio Tinto said. The world's No. 2 miner by market value said the partners have agreed on measures to monitor underground development financing mechanisms and enhance environmental, social and governance matters, while also approving a new electricity supply agreement.

Rio Tinto said it now expects first sustainable output from Oyu Tolgoi's underground project in the first half of 2023, unlocking the most valuable part of the mine.

Write to Rhiannon Hoyle at rhiannon.hoyle@wsj.com

(END) Dow Jones Newswires

January 24, 2022 18:33 ET (23:33 GMT)

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