Rio Tinto updates Oyu Tolgoi production deadline

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Oyu Tolgoi will be mined in panel sections, including Panel 0, Panel 1 and Panel 2, for orderly extraction of copper.

The news comes as the mining giant has unveiled a pathway for the ongoing development of the Mongolian site, including a definitive production timeline estimate for Panel 0, where production will take place.

Rio Tinto has revised the timeframe to include the known and forecasted impacts of the COVID-19 pandemic on Mongolia.

The company has also revised the budget for Panel 0 to $US6.75 billion ($8.9 billion).

This timeline would see Oyu Tolgoi become the world’s fourth largest copper mine by year 2030.

Rio Tinto, the Government of Mongolia and Turquoise Hill are now working to finalise three further milestones: the outstanding government approvals, funding and a power solution.

Once finalised, they will ensure caving operations can commence at Oyu Tolgoi next year, unlocking the most valuable part of the mine.

Panels 1 and 2, which will be necessary to the proposed ramp-up to 95,000 tonnes of ore per day are subject to further studies with the initial recommendations expected by mid-2021.

The studies will consider options and costs to recover copper contained within the pillars added to the Panel 0 mine design.

“We now have a pathway to bring the underground project into production,” Rio Tinto chief executive of copper and diamonds Arnaud Soirat said.

“We will continue to work together with the Government of Mongolia and Turquoise Hill Resources to progress the project, including finalising all necessary approvals and agreeing a solution on power and funding.”

Oyu Tolgoi is expected to produce 480,000 tonnes of copper per year from 2028 to 2036 from its open pit and underground operations.

This compares with the 146,300 tonnes that were produced from the open pit in 2019.

The underground ore reserve has an average copper grade of 1.53 per cent, three times that of the open pit ore reserve of 0.31 grams per tonne of gold, providing the project with additional expansion options.