PERTH (miningweekly.com) – Mining giant Rio Tinto on Tuesday announced the signing of the mine development and financing plan for the underground mine at the Oyu Tolgoi copper operation, in Mongolia.

The plan addressed key outstanding shareholder issues, and set out an agreed basis for the funding of the project, Rio said in a statement.

The development of the $6.5-billion Oyu Tolgoi project had been stalled as the project partners, which include the Mongolian government, had been working to resolve issues, including a tax dispute.

Rio reported that with a new pathway to development of the underground mine agreed, the focus now shifted to finalising the project finance, the feasibility study and securing all necessary permits so that the underground mine development could proceed.

“The resolution of the outstanding issues reinforces the principles of the investment agreement signed in 2009, which underpinned the $6-billion invested in Oyu Tolgoi to date, and provides a clear and stable framework for the future,” said Rio copper and coal CEO Jean-Sébastien Jacques.

The construction of the first phase of the Oyu Tolgoi project, which consisted of the openpit mine, was completed on schedule in less than 24 months.

The operation celebrated one-million tonnes of copper concentrate shipped in March this year, less than two years after the first production left the mine.

The Mongolian government has a 34% stake in the project, with Rio Tinto subsidiary Turquoise Hill holding the remaining 66% interest. Rio has a 51% stake in Turquoise Hill.

Mongolian Prime Minister Chimediin Saikhanbileg said on Tuesday that the further development of Oyu Tolgoi would be of great economic significance to the country.

“We have finalised a way forward with our partners which re-establishes the foundations of a new and constructive relationship based on mutual trust and our joint long-term commitment to Mongolia’s growth.

“Unlocking Oyu Tolgoi’s underground mine will have a significant impact on the Mongolian economy, which will benefit Mongolian citizens for generations to come.  Our joint agreement clearly positions Mongolia as an attractive country for investment and underscores the fact that Mongolia is open for business.”

Estimates indicate that Oyu Tolgoi contains 2.7-million tonnes of recoverable copper and 1.7-million ounces of recoverable gold in reserves. The scale of deposits at Oyu Tolgoi is expected to allow the project to operate for over 50 years. The underground section of the mine is estimated to contain up to 80% of the value of the project.