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Oyu Tolgoi underground mine project, Mongolia – update

Image of Oyu Tolg stairway to the sky

Photo by Copyright © 2023 Rio Tinto

26th April 2024

By: Sheila Barradas

Creamer Media Research Coordinator & Senior Deputy Editor

     

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Name of the Project
Oyu Tolgoi underground mine project.

Location
Mongolia.

Project Owner/s
Rio Tinto (66%) and the government of Mongolia (34%).

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
The capital forecast for the project is $7.06-billion, an increase of $0.3-billion against the 2020 definitive estimate, owing largely to COVID-19 disruptions.

Planned Start/End Date
The operation is expected to ramp up to deliver average mined copper production of about 500 000 t/y (100% basis) between 2028 and 2036.

Latest Developments
Rio Tinto has reported in its first quarter production results that the sinking of ventilation shafts 3 and 4 is progressing, and reached depths of 1 076 m and 1 150 m below ground level respectively at the end of March.

Shaft 4 breakthrough (sinking completion) was achieved in early April 2024. Both shafts remain on track to be commissioned in the second half of 2024.

Construction of the conveyor to surface works is continuing to plan and was 94% complete at the end of the quarter. Commissioning remains on track for the second half of 2024. 

Construction works for the concentrator conversion remain on schedule. Commissioning is expected to be progressively completed from the fourth quarter of 2024 until the second quarter of 2025.

Construction of primary crusher 2 started in December 2023 and is due to be completed by the end of 2025.

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 (Mongolia) , tel +976 11 331880 or email online@ot.mn.
 

Edited by Creamer Media Reporter

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