3rd Jul 2020 08:07
(Alliance News) - Rio Tinto PLC on Friday said it is expecting delays of potentially more than two years at Oyu Tolgoi and downgraded reserves after changing the mine design.
Regulations in Mongolia require that mining companies submit an updated feasibility study every five years. This latest Oyu Tolgoi study includes a new mine design for panel 0 of the Hugo Dummett North underground mine, which confirms that the caving method of mining is still valid and that underground schedule costs are still within expected ranges.
The ranges, which have previously been disclosed, include a delay of between 21 and 29 months for first sustainable production compared to the feasibility study guidance from 2016 and a USD1.3 billion to USD1.8 billion increase in development capital from the original USD5.3 billion.
After drilling and mapping at depth suggested some stability risks associated with the original mine design, changes have been made. The new design will keep two in-situ rock pillars at either side of panel 0 to retain stability.
Due to leaving the pillars in place, material contained in these has been reclassified as mineral resources from ore reserves. Part of the material from the pillars is expected to be recoverable at a later stage after more studies.
Probable ore reserves at Hugo Dummett North have been reduced to 400 million tonnes from 447 million tonnes while probable ore reserves at the Hugo Dummett North Extension have fallen to 40 million tonnes from 32 million.
Rio Tinto said the feasibility study is complete and in the process of being submitted to the Mongolian government.
The company owns a 33.4% stake in Hugo Dummett North and 29.5% stake in the Hugo Dummett North Extension.
Arnaud Soirat, chief executive of Copper & Diamonds at Rio Tinto, said: "This amended mine design is another positive step in the development of the underground mine which will unlock the most valuable part of Oyu Tolgoi. We remain focused on delivering the underground project safely and within the guidance ranges we have announced on both cost and schedule."
By Anna Farley; [email protected]
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