Rio Tinto said that the schedule and cost estimates for the underground expansion of its Oyu Tolgoi copper-gold mine in Mongolia continue to be within the previously announced ranges, following the completion of an updated feasibility study.
The mining major has cut the estimated reserves it plans to mine at the copper-gold project after taking into account a new mine design for Panel 0 of the Hugo Dummett North underground mine at the Oyu Tolgoi project.
According to Rio Tinto, the new design also confirms that the caving method of mining continues to be valid.
The company said that it is in the process of submitting the updated feasibility study to the Mongolian government. Mining companies are required to file updated feasibility studies every five years as per Mongolian regulations and standards.
Rio Tinto expects the first sustainable production from the expanded Oyu Tolgoi copper-mine to be between October 2022 and June 2023. This will be a delay of 21-29 months compared to the original feasibility study guidance issued by the company in 2016 while there will be an increase of AUD1.3bn ($900m)-AUD1.8bn ($1.25bn) in the development capital from the original AUD5.3bn ($3.68bn).
Rio Tinto revealed that the detailed study, design, engineering, and optimisation work is being done for supporting the definitive estimate of Panel 0 for the development of the orebody, which is scheduled for the second half of this year.
The estimates will be subject to any other scheduling delays or increases in capital costs resulting from the impacts of the coronavirus pandemic, said the mining major.
Rio Tinto copper and diamonds chief executive Arnaud Soirat said “This amended mine design is another positive step in the development of the underground mine which will unlock the most valuable part of Oyu Tolgoi. We remain focused on delivering the underground project safely and within the guidance ranges we have announced on both cost and schedule.”
Stakeholders of the Oyu Tolgoi copper-gold mine
The Oyu Tolgoi copper-gold mine is located in Mongolia’s South Gobi region. Rio Tinto owns a stake of around 50.8% stake in Turquoise Hill Resources, which in turn has a 66% interest in the copper-gold project.
The Mongolian government, represented by Erdenes Oyu Tolgoi, holds a 34% stake in the mine.
