Rio Tinto Reaches $138.75 Million Settlement Over Investor Fraud Claims in Mongolian Mine Expansion

Rio Tinto Plc (NYSE: RIO; ASX: RIO) has agreed to pay $138.75 million to resolve a class action lawsuit brought by investors who accused the mining giant of fraud. The case centers on allegations that the company concealed key setbacks in the development of the Oyu Tolgoi copper and gold mine—one of the largest known copper and gold deposits in the world, located in the South Gobi Desert of Mongolia.

Filed in the U.S. District Court for the Southern District of New York, the lawsuit claimed Rio Tinto and its former subsidiary, Turquoise Hill Resources Ltd., misled shareholders by publicly stating that the underground expansion project remained on schedule and on budget, even as internal reports showed otherwise. According to court documents, the project was falling up to two and a half years behind schedule and trending up to $1.9 billion over its originally forecasted budget (Reuters, 2024).

The complaint also drew heavily on whistleblower allegations from Richard Bowley, a former employee who worked on the Oyu Tolgoi project. Bowley claimed that Rio Tinto was fully aware of construction flaws and escalating costs well before it disclosed them publicly. It wasn't until July 2019 that Rio formally announced the budget overrun and revised its capital expenditure estimates to between $6.5 billion and $7.2 billion (Rio Tinto Annual Report, 2019).

The proposed settlement still requires approval from a federal judge. If approved, attorneys representing the shareholder class plan to request legal fees of up to 13% of the settlement—approximately $18 million—along with an additional $2.6 million in expenses, according to court filings.

The case underscores growing investor scrutiny of transparency in major resource projects, especially those involving complex engineering challenges and geopolitical sensitivities. Oyu Tolgoi, operated in partnership with the Mongolian government, is seen as a cornerstone of Rio Tinto’s long-term copper strategy, particularly as demand for the metal rises in connection with global electrification trends.