Fair Contracts, Fair Returns: How Other Countries Structured Their Biggest Mine Deals

Oyu Tolgoi: a stake without dividends

The Oyu Tolgoi agreement gave Mongolia ownership but postponed its cash. The state funded its stake with money borrowed from its partner, not its own capital, so the mine's profits first go to repaying that loan.

Item	Status
Investment Agreement	Signed October 2009; initial term 30 years, after which the state's stake can rise to 50%; the state's 34% can never be diluted (Oyu Tolgoi)
Funding the state's stake	The partner funds the state's share of costs and Mongolia incurs a debt; it is repaid with interest from the mine's cash flow, never directly by the state; dividends are paid only after the loans are repaid (Oyu Tolgoi)
Ownership	Rio Tinto 66%, Erdenes Oyu Tolgoi 34% (Rio Tinto 20-F)
2022 agreement	US$2.4 billion of Mongolia's debt written off: US$1.4 billion of funding plus US$1 billion of accrued interest (NS Energy)
Taxes and payments	About US$6.1 billion in taxes, royalties and other payments since 2010 (GeoConversation)
Dividends	Originally expected in 2017; the earliest realistic estimate is now 2037 (GeoConversation)
2026 terms	Interest on the remaining loan cut by 2.5 percentage points (GeoConversation); the loan rate is now reviewed every 3 years instead of every 7 (Arctus)
Benefit split	According to the National Security Council, Mongolia received 25–31% of benefits over 17 years, mostly through taxes, against the 53% the agreement intended (Arctus)
Contract transparency	In 2019 Mongolia published 162 contracts, but most central-government contracts remained secret (NRGI)

The core problem. Ownership is not the same as benefit. When the state's stake is funded by loans, every cost overrun and delay grows the debt and pushes dividends further away. At Oyu Tolgoi, project costs rose from US$5.3 billion to US$6.75 billion and commercial production slipped by nearly two years (GeoConversation).

Tanzania: a free stake and a 50/50 split

When Tanzania settled a long dispute in 2019, it took the state's stake free of any loan and fixed an equal split of total economic benefits in numbers.

Chapter	What Tanzania did
4. Settlement agreement	20 October 2019: Barrick agreed to pay US$300 million to settle all tax and other disputes (Barrick)
3. State stake	The government holds a 16% free carried stake in each of the Bulyanhulu, North Mara and Buzwagi mines (Barrick)
7. Benefit split	Economic benefits are shared 50/50; the state's half counts taxes, royalties, clearing fees and its share of cash distributions; an annual true-up keeps the 50/50 split (Barrick)
5. Company structure	A new company, Twiga Minerals, manages the three mines and gives the government full visibility of and participation in operating decisions (Barrick)
12. Disputes	An Africa-focused international dispute resolution framework; the concentrate export ban was lifted (Barrick)
8. Local content	96% of the workforce is Tanzanian and 49% comes from nearby communities; more than 90% of procurement goes to Tanzanian suppliers (Barrick)
Results	US$4.79 billion injected into Tanzania's economy since 2019, including US$558 million in the first half of 2025 (Barrick)

What Mongolia can copy

• Take the state's stake as a free carried interest, not a loan, so no debt builds up and dividends are not pushed back.
• Agree the split of total benefits (taxes + royalties + dividends) in numbers, not just an equity percentage.
• Reconcile the split every year and correct any gap the next year. Oyu Tolgoi's 53% target could be measured this way.

What doesn't transfer directly

• Tanzania's deal followed an export ban and a mine closure; that path carries a high cost in investor confidence.
• It came when Barrick took over the mines from Acacia, giving both sides a fresh start.

Indonesia: 51% and a processing condition

Rather than simply extend its old contract, Indonesia bought a majority stake, moved the mine to a licence regime, and tied the extension to processing at home.

Chapter	What Indonesia did
3. State stake	21 December 2018: state-owned Inalum paid Freeport-McMoRan and Rio Tinto US$3.85 billion, raising its stake in PT Freeport Indonesia from 9.36% to 51.23% (ESDM)
7. Regional share	10% of the 51.23% goes to Papua; Inalum lent the regional company US$819 million to buy it, repaid from dividends (ESDM)
1, 4. Contract → licence	The Contract of Work dating from 1967 was replaced by an IUPK special licence, extended by 2 × 10 years to 2041 (ESDM)
8. In-country processing	An obligation to build a smelter within five years (ESDM); the Manyar smelter in Gresik was substantially complete in June 2024 and began commissioning (Freeport)
3. Further stake	The government plans to raise its stake to 61% if the licence is extended beyond 2041 (Indonesia Business Post)
Results	US$4.3 billion paid to the state in 2025; expected to fall to US$2.6 billion in 2026 after the Grasberg landslide, then reach US$4.7 billion in 2027 (including US$1.9 billion in dividends) (Investortrust)

What Mongolia can copy

• Tie extensions and new licences to time-bound obligations for in-country processing (smelting, refining).
• Give the host region (aimag, soum) its own stake, financed from dividends.

What doesn't transfer directly

• Indonesia paid US$3.85 billion in cash for its 51%; without that money, Mongolia buying a stake on credit would repeat Oyu Tolgoi's mistake.
• Smelters are expensive; Mongolia would need to plan for power, water and transport first.

Western Australia: contracts ratified by Parliament and public

Western Australia gives every major mining and processing agreement effect through its own Act of Parliament, so the full contract text is open to anyone in the state's legislation database.

Chapter	What Western Australia does
4. Contracts as law	The government administers 64 State Agreements, each given effect by an Agreement Act of Parliament, across 16 sectors including iron ore, gold, copper, nickel, coal and gas (WA Government)
10. Transparency	Full agreement texts are published in the legislation database; for example the 1992 Hope Downs iron ore agreement (WA Legislation)
History	The first agreements date from the 1960s: Hamersley Range (1963), Mount Newman (1964), Robe River (1964) (WA Government)

What Mongolia can copy

• Have Parliament ratify strategic deposit contracts as law and publish them in full. This gives investors stability and citizens oversight.
• Fully implement the EITI requirement to publish all contracts granted, entered into or amended from 1 January 2021 (NRGI).

What doesn't transfer directly

• Changing a contract ratified as law requires another law; given how often Mongolia's contracts have been disputed, the terms need careful preparation first.

Botswana: marketing rights

Beyond equity, Botswana made the right to sell its own output a central negotiating point; its 2025 agreement raises the state company's share of sales from 25% to 50% over 10 years. See the Botswana profile for details.

Comparison table

Across three questions, Mongolia's biggest gaps are a loan-funded state stake and no mechanism to reconcile the benefit split.

Question	Tanzania	Indonesia	Western Australia	Botswana	Mongolia (Oyu Tolgoi)
How the state's stake was granted	16% free carried	51.23%, US$3.85bn in cash	No direct stake	Debswana 50%	34%, financed by loans
Numeric benefit-split target	50/50, reconciled yearly	No numeric target stated	—	Up to 50% of sales	53% target, 25–31% actual
How the contract is secured	Agreement with government	IUPK licence	Act of Parliament, public	Agreement with government	Investment Agreement
Local conditions	96% local staff, 90%+ local procurement	Smelter	—	Diversification fund	—

Sources are in each country section.

A path for Mongolia

Phase	Action	Model	Owner
1. Make it visible (0–12 months)	Calculate Oyu Tolgoi's benefit split against the 53% target every year and publish it	Tanzania	Ministry of Finance, Erdenes Oyu Tolgoi
	Publish all mineral contracts since 2021 in full, unredacted	Western Australia, EITI	Ministry of Mining
2. A standard for new deposits (1–3 years)	For new strategic deposits: a free carried state stake instead of a loan, a numeric total-benefit split, and a yearly true-up	Tanzania	Parliament, Government
	Ratify strategic deposit contracts as Acts of Parliament	Western Australia	Parliament
3. Extensions and value added (3–5 years)	Tie licence extensions to numeric obligations for in-country processing, suppliers and workforce	Indonesia, Tanzania	Ministry of Mining
	Give host aimags and soums their own stake or revenue share	Indonesia	Parliament

This path is a policy proposal, not a legal opinion; each phase needs detailed work with lawyers, finance specialists and contract experts.

Sources

Mongolia

• Oyu Tolgoi — Investment Agreement and Shareholders' Agreement Q&A
• Rio Tinto 20-F 2025
• NS Energy — the 2022 Oyu Tolgoi agreement
• GeoConversation — Oyu Tolgoi still pays no dividends to Mongolia (15 July 2026)
• Arctus Analytics — New financial terms on Oyu Tolgoi (2 July 2026)
• NRGI — Mongolia reaffirms commitment to publish contracts (2019)

Tanzania

• Barrick — Launch of Twiga Minerals (20 October 2019)
• Barrick — Five years of the Twiga partnership (7 July 2025)

Indonesia

• Indonesia's Ministry of Energy and Mineral Resources — Freeport divestment completed (21 December 2018)
• Freeport — Commissioning of the Manyar smelter (2 July 2024)
• Indonesia Business Post — plan to raise the state stake to 61% (2023)
• Investortrust — Freeport's payments to the state (15 July 2026)

Western Australia

• Government of Western Australia — List of State Agreements
• WA Legislation — Iron Ore (Hope Downs) Agreement Act 1992