Name of the Project
Oyu Tolgoi underground mine project.

Location
Mongolia.

Project Owner/s
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 the 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 gold.

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

The size and quality of this Tier-1 resource provide 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%.

Capital Expenditure
In December 2020, Rio Tinto confirmed that the expansion at the mine would cost $6.75-billion, about $1.4-billion higher than its estimate in 2016.

Planned Start/End Date
Rio has also warned that first sustainable production from Oyu Tolgoi will be achieved only between May 2022 and June 2023, about 16 to 30 months later than the original feasibility study guidance in 2016.

Latest Developments
Rio Tinto is willing to cut interest rates on loans to the Mongolian government, given to fund government’s share of the construction costs at the Oyu Tolgoi copper/gold mine, the Financial Times has reported.

According to the publication – citing a letter from Rio Tinto to Mongolia's Prime Minister – Rio wants several regulatory and budgetary issues resolved, as well as a long-term power agreement for the project, in exchange for the cuts.

Earlier this month, an independent review of cost overruns at the project suggested that they had not been caused by geology issues, and had raised "certain questions in relation to the project management process".

Rio and Turquoise Hill Resources reached an agreement in April about funding to expand the mine.

Key Contracts, Suppliers and Consultants
Jacobs Engineering (engineering, procurement and construction management); and Cimic Group’s Thiess (underground decline contractor).

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.