Rio Tinto and Turquoise Hill Resources, through their joint venture Oyu Tolgoi, have submitted a feasibility study for the 300MW Tavan Tolgoi Power Plant to the Mongolian government.
The submission of the feasibility study follows the signing of a power source framework agreement (PSFA) by Oyu Tolgoi with the government in December 2018 to enable the construction of the power plant.
The objective of the Tavan Tolgoi Power Plant will be mainly to power the Oyu Tolgoi copper-gold mine in the South Gobi desert, which has been producing since early 2013.
The coal-based power plant to be built with an estimated cost of up to $924m will serve as a long-term domestic power solution for the copper-gold mine and also the wider South Gobi region.
Location of the Tavan Tolgoi Power Plant
To be built in Tsogttsetsii soum of Umnugovi province, the power plant will be majority-owned by Oyu Tolgoi. It will be constructed near the Tavan Tolgoi coal mining district, located nearly 150km from the Oyu Tolgoi copper-gold project.
Currently, the copper-gold mine is being powered by China’s Inner Mongolian Western Grid through overhead power lines under a power purchase agreement with National Power Transmission Grid (NPTG) and the Inner Mongolian Power Company (IMPC).
According to Turquoise Hill Resources, Oyu Tolgoi has made substantial progress to develop a cost competitive and optimal solution for the Tavan Tolgoi Power Plant with a fully-negotiated EPC contract, which is ready to be formally awarded.
The company said that the current schedule targets two units of the new power plant in Mongolia to be brought online by June 2024.
Turquoise Hill Resources CEO Ulf Quellmann said: “Certainty of safe, reliable and stable long term power supply is fundamental to the development of an underground mining project like Oyu Tolgoi.
“We will continue to work with the Government of Mongolia and Rio Tinto on behalf of all stakeholders to determine the preferred power solution for Oyu Tolgoi.”
Rio Tinto said that alongside the Tavan Tolgoi Power Plant, it is in talks with the Mongolian government to advance alternative options to source domestic power, which include a renewable power component.
Rio Tinto copper and diamonds chief executive Arnaud Soirat said: “Rio Tinto, Turquoise Hill and the Government of Mongolia are all committed to securing a reliable and long term domestic power source for the Oyu Tolgoi mine and are working together to achieve this”.
