Tinto Plc has delayed development of the underground mine at
Oyu Tolgoi in Mongolia as the terms of project financing will
need to be approved by the countrys parliament, the miner
said July 29.
parliament is currently in summer recess and the parliamentary
approval process may take some time to work through," Rio Tinto
All funding and work
on the underground mine will be delayed until matters with the
government are resolved and a new timetable has been agreed
upon, the company said.
In the interim, Rio
Tinto will focus on the ramp-up of the Oyu Tolgoi open-pit mine
and exports of concentrate, it said.
"Oyu Tolgoi is largely
uneconomic without the underground (mine) being put in place,"
a market expert told AMM sister publication Metal
"From the start,
Mongolia has been saying it will have to approve the funding,"
said Dale Choi, an analyst at Mongolian Metals & Mining
Research. "As a shareholder (Mongolia will) have to pay their
share of the capex and they have to accept it. (The issue) will
be a solid discussion (in the parliament)."
Rio Tinto made its
first copper concentrate shipment from the mine July 9 after a
number of delays.
According to prior
estimates, the underground mine was expected to be operational
in 2018-19 and account for 35 percent of Mongolias gross
domestic product by 2020.
production over 20 years from open-pit and underground mining
at the Oyu Tolgoi project is expected to be 430,000 tonnes per
year of copper and 425,000 ounces of gold per year, Rio Tinto
government has a 34-percent stake in Oyu Tolgoi and Turquoise
Hill, a unit of Rio Tinto, holds the rest.
A version of this
article was first published in AMM sister publication Metal