Tinto Plc may start exporting from the $6.6-billion Oyu Tolgoi
copper mine in Mongolia as soon as June 14.
"We have always said
the first shipment will be in June and now we are (aiming for)
June 14 subject to government approval and some paperwork that
still needs to be done," a source at Oyu Tolgoi told
AMM sister publication Metal Bulletin without
giving details on the pending approvals. "It seems positive
(for a June 14 start)."
The Turquoise Hill
unit of Rio Tinto has been in continuing talks with the
Mongolian government on a range of issues, including project
development and costs, operating budget, project financing,
management fees and governance. The Mongolian government has a
34-percent stake in Oyu Tolgoi.
The source said the
first shipment will go to Chinese smelters but noted that "we
are also negotiating with the international trading community."
He declined to name the smelters or traders.
Oyu Tolgoi has entered
into sales contracts for 75 percent of concentrate production
from the project on international terms, Rio Tinto had said in
amm.com, Jan. 15). "In addition to the signed
contracts, Oyu Tolgoi has committed in principle to sell up to
25 percent of concentrate production on international terms to
smelters in Inner Mongolia for the first 10 years, subject to
the conclusion of detailed sales contracts."
Production from the
Oyu Tolgoi project may partially offset the loss of copper
output caused by a wall slide at Rio Tintos Bingham
Canyon Mine in Utah (
amm.com, April 11) and an accident at
Freeport-McMoRan Copper & Gold Inc.s Grasberg Mine in
amm.com, June 4).
Oyu Tolgoi is a
crucial project for Mongolia as it is expected to account for
35 percent of the countrys gross domestic product when it
is fully operational in 2020. Over its life, the Oyu Tolgoi
project is expected to produce 425,000 tonnes of copper and
460,000 ounces of gold per year.
The start of Oyu
Tolgoi is a critical test for future foreign investment in the
Mongolian mining sector, which faced huge challenges last year
when the government proposed an overhaul of the countrys
minerals law and sought a bigger stake in Oyu Tolgoi.
A version of this article was first published by AMM sister
publication Metal Bulletin.