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Rio Tinto ships first Oyu Tolgoi copper

Keywords: Tags  Rio Tinto, copper, copper concentrate, Oyu Tolgoi, copper shipments, Shivani Singh

SINGAPORE — Rio Tinto shipped the first copper concentrate from its $6.2-billion Oyu Tolgoi Mine in South Gobi, Mongolia, July 9.

"Constructing a mine of this scale is a fantastic achievement, but watching Mongolian concentrate leaving the gates is the moment we have all been working towards," Oyu Tolgoi LLC chief executive officer Cameron McRae said in a statement. "Today is a big first step in moving from a world-class construction project to a world-class copper business."

The Oyu Tolgoi copper mine is vital to reducing Rio Tinto’s dependence on iron ore.

"Oyu Tolgoi starts production at a time when undeveloped quality copper assets are scarce and the outlook for copper continues to be strong. With continued development, Oyu Tolgoi will generate wealth for many decades to come," Rio Tinto copper chief executive officer Jean-Sebastien Jacques said in a separate statement.

The initial sale will amount to about 5,800 tonnes of copper concentrate, Oyu Tolgoi said.

"Today, the first convoy of 16 trucks, carrying 576 tonnes of Oyu Tolgoi ... copper concentrate departed," Oyu Tolgoi said, adding that the remainder of the shipment will be transported to customers after Mongolia’s Naadam holiday from July 11-13.

Oyu Tolgoi executives have said that the first shipments would be to smelters in China, with no immediate plans to ship to Indonesian smelters hurt by the closure of the Grasberg Mine.

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

The future $4 billion in project funding for the mine expansion hinged on the first shipment, an important milestone for Rio Tinto.

The project currently has an open-pit mine, but the underground mine is expected to be operational in 2018-19.

Oyu Tolgoi’s average annual output over 20 years from open-pit and underground mining is expected to be 430,000 tonnes of copper and 425,000 ounces of gold, Rio Tinto said.

Rio Tinto paid $1.1 billion in taxes and payments to the Mongolian government through June. The project is expected to account for 35 percent of Mongolia’s gross domestic product by 2020, when it is fully operational.

Oyu Tolgoi currently has stockpiles of about 50,000 tonnes of copper concentrate.

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

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