In March the United States refused to support the World Bank's involvement in the same project.
Oyu Tolgoi is Mongolia's largest investment project and is expected to boost the country's economy by about one third when in production.
The six billion dollar mine is expected to start production in June after the settling of disputes between Rio Tinto and the Mongolian government.
Correspondent: Karon Snowdon
Speaker: Carmelan Polce, executive director, Jubilee Australia (independent NGO)
SNOWDON: Its a six billion dollar project, Mongolia's biggest. Rio Tinto went to the market to find up to a reported 4 billion dollars to keep it going.
Many big international banks, and several Australian commercial banks are on board. So is the European Bank for Reconstruction and Development, the EBRD and the World Bank's finance arm, the IFC. But in February, the US government abstained from the vote to approve the IFC's loan to Rio. While it noted the project's positive economic potential the US position paper listed a large number of concerns on environmental grounds and inadequate disclosure for when construction ends and operations begin.
US POSITION QUOTE: First, the United States believes the Environmental and Social Impact Assessment has gaps in critically important information, particularly related to the operations phase of the project and mine closure. Specifically, the Boards of the IFC and EBRD are being asked to make a decision on this project without seeing the agreed commitments contained in the forthcoming Operations Phase Environmental Management Plans.
SNOWDON: The Australian government's export investment finance corporation, EFIC has no such qualms. Its approved a loan to Rio.
EFIC won't disclose details of the loan but a spokeswoman said Mongolia is a frontier market which commercial financing lacks the capacity to service. She added that 200 smaller exporters will be supported indirectly as a result of Oyu Tolgoi's success.
The independent NGO Jubilee Australia has concerns about the impact of Oyu Tolgoi on the scarce water resources in the Gobi Desert and the on the nomadic herders who live there. Rio will divert a river away from its open pit mine.
Carmelan Polce, Jubilee's Executive Director also believes the environmental impact statements are inadequate and is critical of EFIC's involvement..
POLCE: And we think that's it premature for EFIC to signal its consent to provide funding before these important issues are resolved. There are two complaints that have been submitted to the World Bank that are still being reviewed, one has to do with water and one has to do with the relocation agreement that Rio Tinto is organising with the herders. These complaints are still outstanding, they're still being mediated by the World Bank's ombudsman. And yet Rio Tinto is putting a lot of pressure on the herders to agree to the development consents so they can move forward.
SNOWDON: So what do you think of EFIC confirming that it is ready to approve being a finance partner to this project if the other financing comes through?
POLCE: I think that EFIC has a track record of being dragged along on these projects and we think that EFIC should stand up and refuse to participate until the issues are resolved.
SNOWDON: Rio Tinto has been at odds with the Mongolian government over costs and the share of revenues to the government which has a 34% stake in the mine. At Rio Tinto's AGM last week Oyu Tolgoi wasn't a big topic of discussion. RIO's new CEO Sam Walsh only had this to say.
WALSH: And our Oyu Tolgoi project is due to start shipping to customers in the first half of this year. This will depend on the ongoing discussions with the government of Mongolia where constructive progress is being made.
SNOWDON: Its not unusual for EFIC to make loans to large corporations -- a fact that's bought it some criticism from a government review. In 2011 the construction company Leightons received an 82 million dollar facility. When fully operational, Oyu Tolgoi is expected to produce 450,000 tonnes of copper and 330,000 ounces of gold a year. It could have a mine life of between 35 and 100 years.