Rio Tinto and Ömnogovi: A Community Cooperation Agreement
(9 pages of text)
This case examines the business decisions around managing the community impact of a mining development in the Gobi Desert region of Mongolia at Oyu Tolgoi—one of the larger copper and gold deposits in the world, and a flagship project of Rio Tinto. In 2009, a mining development agreement was reached with the Government of Mongolia on the national level, but negotiations were just ramping up at the local level. New legislation mandated the creation of a local-level agreement, but the exact requirements were vague, leaving a great deal of ambiguity about the obligations of the company. Hoping to establish its so-called social licence to operate, Rio Tinto committed to discussions with local authorities, but the many stakeholders involved have competing interests.
This case is suitable for use in an undergraduate- or graduate-level program (MBA, EMBA) in courses on non-market strategy global strategy sustainability, business and society, business ethics, or business and government.
After completion of the case, students will be able to:
- Demonstrate non-market strategy analysis techniques including stakeholder mapping and PESTEL (political, economic, social, technological, environmental, and legal) analysis.
- Understand how to manage business-community relations in an emerging economy.
- Understand the concept of local level or community cooperation agreements and demonstrate the complexity of developing a mutually beneficial agreement for the many stakeholders involved.
- Identify the competing interests within a company, including legal versus ethical obligations, the firm’s reputation, and its call to corporate social responsibility.
Mining, Quarrying, and Oil and Gas Extraction
Mongolia, Large, 2014
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