Name of the Project
Oyu Tolgoi underground mine project.

Location
Mongolia.

Client
Oyu Tolgoi is jointly owned by the Mongolia government (34%) and Turquoise Hill Resources (66%, of which Rio Tinto owns 51%). Rio Tinto has been managing the project since 2010.

Project Description
The Oyu Tolgoi openpit mine was completed on schedule in less than 24 months and production started in 2013. Since then, more than 440 000 t of copper have been sold.

About $6.4-billion has been invested to develop the openpit mine, concentrator and associated infrastructure, with an additional $500-million of capital costs for initial development of the underground mine.

The underground mine is expected to produce more than 500 000 t/y of copper, compared with current openpit production of 175 000 t/y to 200 000 t/y.

The mine also benefits from significant gold by-products, with an average gold grade of 0.35 g/t.

Underground production will come from the Hugo Dummett North deposit, including the North Extension, which contains probable ore reserves of 499-million tonnes, with an average grade of 1.66% copper and 0.35 g/t of gold.

The material from this brownfield expansion will use the existing concentrator and infrastructure.

The size and quality of this Tier-one resource provides additional expansion options, which could sustain production for many decades.

Potential Job Creation
Not stated.

Net Present Value/Internal Rate of Return
The project has an expected internal rate of return of more than 20%.

Value
The project will entail a $5.3-billion investment.

The Oyu Tolgoi underground development will be funded by project finance debt and cash flows from the openpit operations, as well as cash held by Turquoise Hill Resources.

Duration
The development of the underground mine started in mid-2016, with first production expected in 2021. The mine is expected to be fully ramped up in 2027.

Latest Developments
The project achieved its latest important milestone of sinking the new Shaft 5 this month. The shaft has a final depth of 1 178 m.

Turquoise Hill Resources announced on March 21 that installation of the exhaust fan had started during the fourth quarter of 2017, and was expected to be complete early in the second quarter of 2018.

Shaft 5 is 6.7 m in diameter and will be dedicated to ventilation, thereby increasing the capacity for underground activities.

Key Contracts and Suppliers
Jacobs Engineering (EPCM) and Cimic Group’s Thiess (underground decline contractor).

On Budget and on Time?
The project remains on track.

Contact Details for Project Information
Rio Tinto media relations: Australia/Asia, Ben Mitchell, tel +61 3 9283 3620 or email media.enquiries@riotinto.com.
Turquoise Hill Resources investors and media, Tony Shaffer, tel +1 604 648 3934 or email tony.shaffer@turquoisehill.com.