* Trafigura to provide financing for huge Mongolia mine
* Gets long-term deal to buy output
* Majority mine owner Rio Tinto wrangling with Mongolia on expansion
By Eric Onstad
LONDON, Dec 16 (Reuters) - Commodity trader Trafigura has agreed to provide
financing for the massive Oyu Tolgoi mine in Mongolia in exchange for a
long-term deal to buy an undisclosed portion of the output, it said on Monday.
Rio Tinto , majority owner and operator of Oyu Tolgoi, one of
the world's largest copper and gold mines, has spent months wrangling with the
Mongolian government about plans to expand from an open pit into an underground
Trafigura, which markets a wide range of metals including copper
concentrate, referred to the off-take deal in its first fully public annual
report since being set up 20 years ago.
"We also provide finance in exchange for long-term supplies. For instance,
we recently signed an off-take agreement with Oyu Tolgoi in Mongolia," it said,
giving no further details.
Rio Tinto had no immediate comment on the Trafigura deal.
Rio put the mine's $5 billion expansion on hold in July, saying the
Mongolian government wanted parliament to approve the project's financing.
Mongolia hoped to resolve the dispute by early 2014, a government source told
Reuters last month.
Fifteen banks that have agreed to finance the expansion have told Rio they
will extend their commitments, which were due to expire at the end of the year,
until next March, a statement said on Monday.
Trafigura also said the global copper market is expected to be broadly in
balance next year as low inventories and a recovery in global growth offset
stronger mine output.
"We don't expect prices to rise markedly, but on the other hand, with
concentrates trading at close to cost levels for some producing areas, a
collapse in prices is also unlikely," the Trafigura report said.
The benchmark copper price on the London Metal Exchange has shed 8.3
percent this year, weighed down by more output from new mines such as Oyu Tolgoi
and improved operations at many existing mines.
The global copper market is expected to widen its surplus next year to
328,000 tonnes from 182,000 tonnes this year, analysts polled by Reuters said in