Rio Tinto has entered into agreements with three Chinese EPC contractors that could potentially solve the company’s domestic power challenge at its majority-owned Oyu Tolgoi copper-gold operation in Mongolia.

The three state-owned contractors – China Machinery Engineering Corp, Harbin Electric International Co Ltd and Power Construction Corp of China – have been asked to submit a bid for the engineering, design and construction of a power station.

“The agreement entered into with each bidder provides that, where a bidder submits a conforming bid and it is not accepted by Oyu Tolgoi LLC, Oyu Tolgoi LLC will pay $500,000 to that bidder to offset the costs of preparing that bid and the early engineering and design work packs,” Rio, which has a 33.5% indirect ownership interest in the limited company, said.

In its June quarter results, released earlier this week, Rio said Oyu Tolgoi LLC was “progressing studies and preparations for suitable power solutions and continues to discuss the provision of domestic power with the Government of Mongolia”.

Earlier in the year, the Southern Region Power Sector Co-operation Agreement, under which Oyu Tolgoi was committed to working with the Government of Mongolia on a Tavan Tolgoi Independent Power Provider project, was cancelled.

The government gave the company four years, from February 2018, to find a domestic power supply for the operation.