Underground production celebrated at Oyu Tolgoi
March 13 2023 - 3:00AM
Business Wire
The Prime Minister of Mongolia, Luvsannamsrain Oyun-Erdene,
today joined Rio Tinto Chief Executive Jakob Stausholm 1.3
kilometres underground to celebrate the commencement of underground
production from the Oyu Tolgoi copper mine in the Gobi Desert.
This was followed by a ceremony with Oyu Tolgoi employees and
leaders, Government of Mongolia representatives, Oyu Tolgoi Board
members and local suppliers to mark this important milestone
towards Oyu Tolgoi ramping up to become one of the world’s leading
copper suppliers.
Since the agreement between the Government of Mongolia and Rio
Tinto in January 2022 to reset the relationship and move the Oyu
Tolgoi underground project forward, 30 drawbells have been blasted
and copper is now being produced from the underground mine. Oyu
Tolgoi is expected to become the fourth-largest copper mine in the
world by 20301, operating in the first quartile of the copper
equivalent cost curve. Ore is currently being processed from Panel
Zero in Hugo North Lift 1 and production will ramp up over the
coming years.
A partnership between Rio Tinto and Mongolia, the Oyu Tolgoi
open pit and concentrator have been succesfully operating for over
a decade. The total workforce of Oyu Tolgoi is currently around
20,000 people, of which 97% are Mongolian. Oyu Tolgoi works with
more than 500 national suppliers and has spent around $15 billion
in Mongolia since 2010, including $4 billion of taxes, fees and
other payments to the state budget.
Developing the underground mine is an investment of over $7
billion, unlocking the most valuable part of the copper resource
for the benefit of all stakeholders. Oyu Tolgoi is expected to
produce around 500,000 tonnes of copper2 per year on average from
2028 to 2036 from the open pit and underground, enough to produce
around 6 million electric vehicles annually, and an average of
around 290,000 tonnes over the reserve life of around 30
years2.
Prime Minister of Mongolia Oyun-Erdene said, “I am proud to
celebrate this major milestone with our partner Rio Tinto as we
look towards Mongolia becoming one of the world’s key copper
producers. The start of underground production at Oyu Tolgoi
demonstrates our ability to work together with investors in a
sustainable manner and become a trusted partner. The next phase of
the partnership will enable the continued successful delivery of
Mongolia’s ‘New Recovery Policy’ and Vision 2050 economic
diversification strategy. Mongolia stands ready to work actively
and mutually beneficially with global investors and partners.”
Rio Tinto Chief Executive Jakob Stausholm said, “We would like
to thank the Government of Mongolia for their commitment as our
partner in achieving this remarkable milestone. We are starting
underground production 1.3 kilometres beneath the remote Gobi
desert from an ore body that will be critical for global copper
production and Mongolia’s ongoing economic development. The copper
produced in this truly world class, high technology mine will help
deliver the electrification needed for a net zero future and grow
Rio Tinto’s copper business.”
Notes to editors
Oyu Tolgoi is jointly owned by Erdenes Oyu Tolgoi LLC on behalf
of the Government of Mongolia (34%) and Rio Tinto (66%).
_________________________ 1 Source: Wood Mackenzie Dec 2022,
based on production from committed projects 2Based on the Oyu
Tolgoi Feasibility Study 2020 (OTFS20). The estimated average
production of ~500ktpa copper for the years 2028-2036 is
underpinned as to 13% by Proved Ore Reserves and 87% by Probable
Ore Reserves. The estimated average production of ~290ktpa copper
for the estimated reserve life of approximately 30 years is
underpinned as to 26% by Proved Ore Reserves and 74% by Probable
Ore Reserves. These production targets are stated as recovered
metal and have been scheduled from current mine designs for the Oyu
Tolgoi underground and open pit mines by Competent Persons in
accordance with the requirements of the Australasian Code for
Reporting of Exploration Results, Minerals Resources and Ore
Reserves, 2012 Edition.
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