Ivanhoe and Rio differ on Oyu Tolgoi mine size

Matt Chambers
From: The Australian
June 19, 2010 12:00AM

RIO Tinto has refused to back an increase in the planned size of the $US4.6 billion ($5.3bn) Oyu Tolgoi copper and gold mine in Mongolia.

RIO Tinto has refused to back a recent increase in the planned size of the $US4.6 billion ($5.3bn) Oyu Tolgoi copper and gold mine in Mongolia laid out by its partner in the project, Ivanhoe Mines, a month ago.

Ivanhoe, which is run by billionaire mining entrepreneur Robert Friedland, released a new development plan for Ivanhoe last month, saying the mine in the South Gobi desert would produce 540,000 tonnes of copper and 670,000 ounces of gold annually from 2013.

Yesterday, Rio confirmed speculation that it believed the plan was ambitious by sticking to the old numbers.

In a presentation in the capital, Ulaanbaatar, Rio copper chief executive Kay Priestly said the company expected the mine to produce an average of 450,000 tonnes of copper a year and just 330,000 ounces of gold.

She did not give a start date.

A Rio spokesman would not comment on the discrepancies between Rio's and Ivanhoe's targets.

Rio is a development and operating partner in Oyu Tolgoi with Ivanhoe, in which it has a 22.4 per cent stake with the option to go to 44 per cent.

The Mongolian government owns 34 per cent of the project.

Despite the presentation being on a seemingly unrelated matter, the big miner did not miss its chance to state its objection to Kevin Rudd's planned mining tax.

In a slide entitled "the dangers of Australian tax reform", Ms Priestly told the Mongolian audience that the planned tax would curtail investment in Australia.

Separately yesterday, Standard & Poor's lifted its outlook on Rio Tinto to positive after metals prices rebounded.

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