Oyu Tolgoi Begins Concentrate Shipments, Hits Snag in Underground Development Funding
The event, according to the company, marks the culmination of a three-year, $6.2-billion project to build the first phase of one of the world’s top five copper mines. Oyu Tolgoi is owned by Turquoise Hill Resources (66%) and Erdenes Oyu Tolgoi (34%). Erdenes Oyu Tolgoi is wholly owned by the Government of Mongolia. Rio Tinto holds a 51% share of Turquoise Hill Resources.
Oyu Tolgoi is forecast to produce average annual production of 430,000 metric tons (mt) of copper and 425,000 oz of gold over the next 20 years from open-pit and underground mines. However, on July 29, Rio Tinto reported that it was notified by the Government of Mongolia that the terms of the project financing provisionally secured for the underground development of Oyu Tolgoi will need to be approved by the Mongolian Parliament.
The Mongolian Parliament is currently in summer recess and the parliamentary approval process may take some time to work through. Rio Tinto said it remains committed to working with the Government of Mongolia to secure project financing. However, in view of the current uncertainty, including continued discussions with the government on a range of other issues, all funding and work on the underground development will be delayed until these matters are concluded and a new timetable has been agreed.