Shaft No.1 at the Oyu Tolgoi project that will be the world’s largest copper mine when the underground portion reaches full production. (Image: Turquoise Hill Resources)
MONGOLIA – Big mining projects come with big price tags, and the Oyu Tolgoi copper-gold mine in the South Gobi area is no exception. The operator and 50% owner Rio Tinto says the cost to complete the underground portion of the mine has jumped by between US$1.2 billion to US$1.9 billion. That brings the total cost to as much as $7.2 billion, a jump of as much as 35% above the original price tag of US$5.3 billion.
With the higher capex comes a 16- to 30-month delay in sustainable production to May 2022 or as late as June 2023.
Rio says that enhanced geotechnical information and data modeling suggests there may be some stability risks associated with the original mine plan. The company is studying options, but warns design changes may require moving or even removing certain underground infrastructure such as the mid-access drive and the ore handling system.
These options have different costs and schedules. The final design will be tested in the first panel of mining early in 2020.
Turquoise Hill Resources, owned 50.8% by Rio Tinto, has been producing copper and gold in Mongolia from open pit mines since 2013. When the underground mine reaches commercial production, Oyu Tolgoi will be the world’s largest copper mine.
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