The government of Mongolia may cancel and replace the development and financial plan for the country’s vast Oyu Tolgoi copper-gold mine, Turquoise Hill Resources (TSX: TRQ; NYSE: TRQ) said today.
The company, which is controlled by Rio Tinto (NYSE: RIO; LSE: RIO; ASX: RIO), said Mongolian authorities are dissatisfied with its plans and are particularly concerned about the costs of the expansion, recently updated to US$6.75 billion, about US$1.5 billion higher than its original estimate.
In 2019 Rio Tinto flagged stability risks associated with the original project design, which translated into as much as an additional US$1.9 billion cost and a 30-month delay.
The miner confirmed the new cost estimate for the underground expansion in December, and noted that production would begin in October 2022.
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