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Rio Tinto delays first copper exports from Oyu Tolgoi Mine

Keywords: Tags  Oyu Tolgoi, copper, gold, Mongolia, Rio Tinto, Turquoise Hill, Norovyn Altankhuyag, Shivani Singh


SINGAPORE — Rio Tinto Plc has delayed the first copper exports from its $6.6-billion Oyu Tolgoi project in Mongolia until the end of June as it awaits final government approvals, a source at Oyu Tolgoi told AMM sister publication Metal Bulletin.

"We have received almost all government authorizations," he said, but some technical details need to be sorted out before Oyu Tolgoi can start exporting.

An Oyu Tolgoi source earlier this week said the first shipment might take place June 14, subject to government approval (amm.com, June 11), and the company reportedly had arranged an event for local media and traders that Mongolian prime minister Norovyn Altankhuyag was expected to attend.

The source said that he "cannot speculate at this point of time" if the prime minister will attend the first shipment at the end of June.

The first shipment will be sent to smelters in China, and for the time being Oyu Tolgoi has no plans to send concentrate to plants that have been hit by the force majeure at Phoenix-based Freeport-McMoRan Copper & Gold Inc.’s Grasberg Mine in Indonesia, he said.

Progress on the Oyu Tolgoi project may partially offset the loss of copper production caused by the force majeure declaration following a fatal accident at Grasberg (amm.com, June 12) and by a wall slide at London-based Rio Tinto’s Bingham Canyon Mine in Utah (amm.com, April 16), market participants have said.

Oyu Tolgoi had entered into sales contracts for 75 percent of concentrate production from the project on international terms, Rio Tinto had said in January (amm.com, Jan. 11). "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."

The Mongolian government has a 34-percent stake in Oyu Tolgoi, and Turquoise Hill Resources Ltd., a unit of Rio Tinto, holds the rest.

Oyu Tolgoi is expected to account for 35 percent of Mongolia’s gross domestic product when it is fully operational in 2020. Over its life, the project is expected to produce 425,000 tonnes of copper and 460,000 ounces of gold per year.

A version of this article was first published by AMM sister publication Metal Bulletin.


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