Name of the Project
Oyu Tolgoi underground mine project.

Location
Mongolia.

Project Owner/s
Turquoise Hill Resources (TRQ) holds a 66% interest in Oyu Tolgoi. The remaining 34% interest is held by the Mongolia government through Erdenes Oyu Tolgoi.

Rio Tinto, with other Rio Tinto affiliates, holds a 50.8% majority interest in TRQ, and provides strategic and operational management services and support for Oyu Tolgoi LLC in respect of its operations and activities.

Project Description
The Oyu Tolgoi underground mine is expected to produce more than 500 000 t/y of copper from 2028 to 2036, compared with current openpit production of 175 000 t/y to 200 000 t/y.

The project has mineral reserves of 1.27-billion tonnes grading 0.81% copper, 0.29 g/t gold and 1.9 g/t silver as at June 30, 2020.

The mineral deposits at Oyu Tolgoi are situated in a structural corridor where mineralisation has been discovered over a 26 km strike length. Four deposits hosting mineral resources have been identified – Oyut, Hugo North, Hugo South and Heruga.

The Oyut openpit is a low-grade copper/gold openpit operation with a current production rate of about 40-million tonnes a year and a planned remaining overall waste-to-ore strip ratio of 2.3:1. Mining is conducted using conventional drill, blast, load and haul methods, and is conducted 24/7, all year round.

Underground production will come from the Hugo 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.

Access at the Hugo North deposit is planned through five shafts, three of which have been completed. Construction of the final two ventilation shafts (Shaft 3 intake ventilation and Shaft 4 exhaust ventilation) is under way. A decline conveyor system, from surface to the underground crushing system, is being developed. Two underground crushers are planned to crush ore from Lift 1.

Production operations are planned to start in Panel 0, then progress into Panel 2 and later into Panel 1. The pillars between the three panels provide the opportunity to optimise the design of Panels 1 and 2 to best suit the geology, geotechnical characteristics and economic return of each panel.

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
The total workforce of Oyu Tolgoi is currently about 20 000 people, of which 97% are Mongolian.

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

Capital Expenditure
$7.75-billion.

Rio Tinto has said the full impact on the cost of the integrated project is subject to further analysis once it has clarity on the timeline for the completion of the undercut criteria and ongoing Covid-19 restrictions.

Planned Start/End Date
First sustainable production from the underground operation is expected in the first half of 2023.

Latest Developments
Underground production has started at the Oyu Tolgoi copper mine.

“We are starting underground production 1.3 km beneath the remote Gobi desert from an orebody that will be critical for global copper production and Mongolia’s ongoing economic development,” diversified miner Rio Tinto CEO Jakob Stausholm has said.

Since the agreement between the government of Mongolia and Rio in January 2022 to reset the relationship and move the Oyu Tolgoi underground project forward, 30 drawbells have been blasted and copper is now being produced from the underground mine. Oyu Tolgoi is expected to become the fourth-biggest copper mine in the world by 2030, operating in the first quartile of the copper equivalent cost curve.

Ore is being processed from Panel Zero in Hugo North Lift 1 and production will ramp up over the coming years.

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, email media.enquiries@riotinto.com.
Turquoise Hill Resources investors and media Tony Shaffer, tel +1 604 648 3934 or email tony.shaffer@turquoisehill.com.