Commodities, Copper, Exploration/Development, News

Oyu Tolgoi enters new chapter

Oyu Tolgoi Rio

When Rio Tinto announced the commencement of underground operations at the Oyu Tolgoi copper mine in Mongolia, the company turned over a new leaf.

The operation has been riddled with disruptions, not just limited to Rio’s arduous journey in buying out Turquoise Hill Resources, but also historical issues with the Government of Mongolia.

After nine months of takeover tussling, the Turquoise Hill transaction was enacted in December 2022, while Rio and the Mongolian Government reset their relationship in January 2022.

Not all issues have been rectified, with a tax dispute continuing, but Rio and Mongolia put on a united front when announcing their underground milestone.

Underground production has commenced 1.3km below the Gobi Desert, which is hoped to eventually support 500,000 tonnes of average annual copper production between 2028 and 2036, equating to the world’s fourth largest copper mine by 2030.

Rio expects Oyu Tolgoi to be able to support the development of 6 million electric vehicles annually, while supporting a total workforce of 20,000 people, 97 per cent of which are Mongolian.

“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,” Mongolian Prime Minister Oyun-Erdene said.

“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.”

Mongolia’s New Recovery Policy looks to address six key economic constraints currently affecting the country, including border ports, industrialisation, energy, green development, urban and rural development, and state efficiency.

Rio Tinto owns a 66 per cent stake in Oyu Tolgoi, with Mongolia holding the remaining 34 per cent interest in the mine.

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