PERTH (miningweekly.com) – Diversified miner Rio Tinto on Monday announced that it would delay the underground development at its Oyu Tolgoi copper project, in Mongolia.
The miner was notified by the Mongolian government that the terms of the project financing provisionally secured for the underground development, reported to cost some $5-billion, would need to be approved by the Mongolian Parliament.
Parliament is currently in summer recess and Rio has been warned that the approval process itself could take some time to work through. As such, the mining major on Monday said it would delay all funding and work on the underground development until the matter has been resolved and a new timetable agreed on.
In the meantime, Rio, through its 51%-held subsidiary Turquoise Hill, formerly Ivanhoe Mines, would continue the management and ramp-up of the openpit mines and export of Oyu Tolgoi concentrate.
Turquoise Hill holds a 66% shareholding in the Oyu Tolgoi project, with the balance belonging to a State-owned mining company.
The mine is expected to produce more than 1.2-billion pounds, or 544 000 t, of copper, three-million ounces of silver and 650 000 oz/y of gold in the first ten years of operation.
Seven years later, at its peak, it is expected to produce about 1.7-billion pounds of copper and one-million ounces of gold.