Rio Tinto to start shipping Oyu Tolgoi copper on June 14
Rio Tinto subsidiary Turquoise Hill Resources owns a stake of 66 per cent in Oyu Tolgoi, with the Mongolian government owning the remainder.
Global miner Rio Tinto plans to start exporting copper from the US$6.2-billion Oyu Tolgoi mine in Mongolia on Friday, according to an invitation received by Reuters, marking the opening of a mine that will eventually make up one-third of the country’s economy.
Journalists have been invited to attend a ceremony at the mine on June 14 to celebrate the first shipment.
Oyu Tolgoi, run by Rio Tinto, is a crucial source of growth for the company as it looks to ease its dependence on iron ore and cast off small or unprofitable assets.
It is particularly important now as the company’s Bingham Canyon mine in Utah was shut by a landslide in April and its 40 per cent owned Grasberg mine in Indonesia has been shut following an accident in May.
Metals traders are eager to hear if Rio has won official approval to export concentrate from Oyu Tolgoi amid the shortfall in shipments from the crippled Grasberg mine, run by Freeport McMoRan Copper & Gold.
Rio Tinto declined to comment on the Oyu Tolgoi event. Its subsidiary, Turquoise Hill Resources Ltd, owns a stake of 66 per cent in the mine, with the Mongolian government owning the remainder.
Rio has been producing at Oyu Tolgoi for several months, and has been aiming to start exporting by the end of June. But it has said since February it would not start shipping until it resolved disputes with the Mongolian government over royalties, costs, management fees and project financing.
The start-up of Oyu Tolgoi has been seen as a crucial test to revive foreign investment in Mongolia’s vital mining sector, which slumped last year after the government moved to tighten investment regulations and sought a bigger stake in Oyu Tolgoi.
In the first ten years, annual output at Oyu Tolgoi is expected to average 330,000 tonnes of copper and 495,000 ounces of gold. By 2020, the mine could make up a third of Mongolia’s economy.
Rio Tinto is close to securing financing for a US$5 billion-plus underground expansion of the mine.