Mongolia: lights come on at Oyu Tolgoi
After a few nervous months, Mongolia has secured a power supply agreement with China for the huge Oyu Tolgoi copper and gold mine. Rio Tinto, the Australian miner developing the $6bn project, confirmed on Monday that it had a binding electricity supply deal.
With that in place, the mine is all set to start commissioning in the next few weeks and begin commercial production next summer.
Rio said in a statement on Monday:
Within the next few weeks, Oyu Tolgoi will start a seven-week commissioning of the ore-processing equipment. First concentrate production will follow within one month and the commencement of commercial production is expected three to five months thereafter.
Rio Tinto Copper chief executive Andrew Harding said “This agreement means we are on track to bring the first phase of the world-class Oyu Tolgoi mine into production in the first half of 2013. When fully developed it will be a top-five copper producer with significant gold production.”
Earlier, Erdenebulgan Oyun, Mongolia’s vice-minister for mining, told the FT’s Leslie Hook that the mine signed a power purchase deal on Sunday.
Oyu Tolgoi, located in the Gobi desert, is the largest mine in Mongolia and accounts for about a third of the country’s economy.
Hook wrote:
The project is seen as a litmus test for how the mineral-rich country of 3m people will develop its natural resources, but the terms of the investment agreement governing the mine have come under pressure from the new Mongolian parliament elected in June.
The mine is 34-per-cent owned by the Mongolian government with the remaining shares in the hands of Rio and Turquoise Hill, a Canadian company in which Rio has a controlling stake.
With that in place, the mine is all set to start commissioning in the next few weeks and begin commercial production next summer.
Rio said in a statement on Monday:
Within the next few weeks, Oyu Tolgoi will start a seven-week commissioning of the ore-processing equipment. First concentrate production will follow within one month and the commencement of commercial production is expected three to five months thereafter.
Rio Tinto Copper chief executive Andrew Harding said “This agreement means we are on track to bring the first phase of the world-class Oyu Tolgoi mine into production in the first half of 2013. When fully developed it will be a top-five copper producer with significant gold production.”
Earlier, Erdenebulgan Oyun, Mongolia’s vice-minister for mining, told the FT’s Leslie Hook that the mine signed a power purchase deal on Sunday.
Oyu Tolgoi, located in the Gobi desert, is the largest mine in Mongolia and accounts for about a third of the country’s economy.
Hook wrote:
The project is seen as a litmus test for how the mineral-rich country of 3m people will develop its natural resources, but the terms of the investment agreement governing the mine have come under pressure from the new Mongolian parliament elected in June.
The mine is 34-per-cent owned by the Mongolian government with the remaining shares in the hands of Rio and Turquoise Hill, a Canadian company in which Rio has a controlling stake.
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