The Oyu Tolgoi copper-gold project in the South Gobi region of Mongolia produced its first copper-gold concentrate on January 31, 2013, following the start of ore processing through the concentrator on January 2. The project is owned 66% by Turquoise Hill Resources of Vancouver, Canada, and 34% by the Mongolian government. Rio Tinto holds a 51% controlling interest in Turquoise Hill Resources and is the project manager.
In a project update released on February 14, 2013, Turquoise Hill reported that construction of the first phase of Oyu Tolgoi development was 99% complete as of year-end 2012. Capital invested in first-phase construction totaled $6 billion as of that date. The final capital cost of first-phase construction is expected to come in at $6.2 billion, within 3% of the initial budget, excluding foreign-exchange exposures.
The Turquoise Hill Resources update also noted that the government of Mongolia has recently raised a number of substantive issues relating to implementation of the Oyu Tolgoi project Investment Agreement, the companion Shareholders’ Agreement, and project finance.
“Turquoise Hill continues to engage with the government and other stakeholders to ensure the continued implementation of the Investment and Shareholders’ agreements in their current form, and to support the on-going development of Oyu Tolgoi for the benefit of all parties. Subject to the resolution of these issues, first commercial production at Oyu Tolgoi is scheduled to commence by the end of June 2013,” the Turquoise Hill update said.
Phase-one Oyu Tolgoi mine production is from the Southern Oyu open pit. The concentrator has an initial throughput capacity of 100,000 mt/d.
A feasibility study for an expansion of operations at Oyu Tolgoi is on-going and is now expected to be completed in the first half of 2014 as the company continues to pursue value engineering and optimization. Planning for the expansion is based on development of an 85,000-mt/d underground block cave mine and an expected increase in concentrator throughput capacity to 160,000 mt/d.
