16th Dec 2020 09:02
(Alliance News) - Rio Tinto PLC on Wednesday set out plans to get its Oyu Tolgoi copper and gold mine in Mongolia to sustainable underground production by October 2022, spending USD6.75 billion to do so.
Rio said the development of the underground project at Oyu Tolgoi, which has suffered a series of setbacks and delays, will unlock the most valuable part of the mine, which by 2030 is expected to be the fourth largest copper mine in the world. Oyu Tolgoi is expected to produce 480,000 tonnes of copper per year on average between 2028 and 2036 from both the open pit and underground, compared to just 146,300 tonnes from the open pit in 2019.
The mine already employs a workforce of over 12,000 people and is one the top three taxpayers in Mongolia, Rio noted. The open pit started production in 2013 and more than a million tonnes of copper in concentrate have been sold since then.
Rio said it still needs to work with partner Turquoise Hill Resources and the Mongolian government on outstanding government approvals, funding and a power solution. Back in June, the government agreed to prioritise building a government-funded power plant.
The mine is owned 34% by the Mongolian government and 66% by Turquoise Hill, in which Rio has a controlling 50.8% stake. Rio has managed the project since 2010. Rio said on Wednesday it still feels that all shareholders should contribute proportionally to the costs of the mine.
"We now have a pathway to bring the underground project into production, which will unlock the most valuable part of Oyu Tolgoi," said Arnaud Soirat, chief executive of Copper & Diamonds at Rio Tinto. "We will continue to work together with the government of Mongolia and Turquoise Hill Resources to progress the project, including finalising all necessary approvals and agreeing a solution on power and funding."
Rio shares were up 1.4% early Wednesday in London at 5,680.00 pence.
By Tom Waite; [email protected]
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