Friday, August 15, 2014

Oyu Tolgoi inks power cooperation accord with Mongolia govt

TORONTO (miningweekly.com) – Rio Tinto subsidiary Turquoise Hill Resources has signed a power-sector cooperation agreement (PSCA) with the Mongolian government that will guide long-term strategic cooperation between the State and Oyu Tolgoi to deliver a comprehensive energy plan for the South Gobi region.

The PSCA will set the stage to explore the feasibility of a Tavan Tolgoi-based independent power producer (IPP).

Turquoise Hill explains that Oyu Tolgoi’s participation in the agreement fulfilled its obligation under the investment agreement to establish a long-term power supply within Mongolia four years after starting commercial production.

“The cooperation agreement is an important opportunity for Oyu Tolgoi to work with the [Mongolian] government toward developing sustainable solutions to secure a long-term, economic power supply from Mongolia,” Turquoise Hill CEO Kay Priestly said in a statement.

The agreement provides a framework for a broad range of power-related issues, including the establishment of a power generation source, transmission lines and power imports. The centrepiece of the PSCA is an open, international tender process to identify and select an IPP to privately fund, construct, own and operate a power plant to supply electricity, with Oyu Tolgoi as the main consumer.

The process to evaluate the IPP option was expected to take 9 to 12 months, the company said.

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