Turquoise Hill Rejects Investment Agreement Renegotiations

Turquoise Hill Resources announced on October 15, 2012, that the company, together with Rio Tinto and Oyu Tolgoi LLC, has rejected a request from the government of Mongolia to renegotiate the Investment Agreement for the Oyu Tolgoi copper-gold-silver project in the South Gobi region of Mongolia. Turquoise Hill’s announcement followed receipt of a let-ter from Mongolia’s Minister of Mining requesting that the parties renegotiate the Investment Agreement that was signed in October 2009 and became fully effective in March 2010. As recent-ly as October 2011, the Mongolian Government reaffirmed the Investment Agreement was signed in full compliance with all laws and regulations of Mongolia.

Turquoise Hill CEO Kay Priestly said, “The Investment Agreement is mutually beneficial for the Mongolian Govern-ment and investors. We have invested nearly $6 billion, created thousands of jobs for Mongolians, and are on the verge of production based on the Investment Agreement, which provides a stable legal framework and is a legally-binding document. The Investment Agreement has been fundamental in building Mongolia’s reputation as an increasingly reliable and secure destination for foreign investment.”

Turquoise Hill holds a 66% interest in the Oyu Tolgoi project. The Mongolian government holds the remaining 34%. Rio Tinto holds a 51% controlling interest in Turquoise Hill.

On October 9, Turquoise Hill reported that construction at the Oyu Tolgoi pro-ject is essentially complete. Construction of the power transmission infrastructure in both Mongolia and China is complete, and the power lines have been success-fully tested with full power loads and are ready for use. Negotiations with Chinese authorities on a power purchase agreement were progressing.

Once a final power agreement has been concluded, first ore is expected to be processed through the Oyu Tolgoi con-centrator within six weeks. First concen-trate production will follow within one month, and the start of commercial pro-duction is expected three to five months thereafter.

As featured in Womp 2012 Vol 11 - www.womp-int.com