Aluminum and Copper

Turquoise Hill says Oyu Tolgoi needs another $1.2 billion funding

Turquoise Hill says Oyu Tolgoi needs another $1.2 billion funding
Mining News Pro - Vancouver-based Turquoise Hill Resources said on Thursday the estimated additional funding required for the Oyu Tolgoi copper mine in Mongolia was now $1.2 billion higher than previously expected.

Delays in underground mining as well as some deferred open-pit metal production have caused an increase in estimated incremental funding requirement to $3.6 billion from the $2.4 billion expected in July. Total costs for the move underground is now approaching $8 billion, up from the Rio’s original budget of $5.3 billion set in 2016.

Some metal production from open-pit mining is expected to be delayed to beyond 2024, the company said, partly due to on-going impacts of on-site COVID-19 curbs and geo-technical events that has resulted in delayed waste movement.

Rio Tinto said last month is challenging the findings of an independent review into $1.4 billion in cost overruns and delays at the Oyu Tolgoi mine in Mongolia, saying the project’s troubles were caused by unpredictable geology issues.

The Independent Consulting Group’s (IGG) report concluded last month that poor management was the main reason the mine’s underground expansion has run into problems affecting its cost and timeline.

The company said its copper production rose 16% to 41,935 tonnes in the third quarter from a year ago, while gold more output more than tripled to 130,799 ounces.

It also said copper and gold production guidance for 2021 remains within the ranges of 150,000 to 180,000 tonnes and 400,000 to 480,000 ounces respectively.

The Mongolian government holds a 34% stake in the Oyu Tolgoi project with Turquoise Hill the remainder.

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