Global mining giant Rio Tinto and its partners have approved the expansion of one of the world’s most ambitious mining projects in Mongolia.
It said in a statement that the huge copper and gold mine at Oyu Tolgoi in Mongolia will be expanded at a cost of $5.3 billion.
“Rio Tinto and its partners, the Government of Mongolia and Turquoise Hill Resources, have approved the next stage in the development of the world-class Oyu Tolgoi copper and gold mine in Mongolia,” the statement said, adding that development of the underground mine will start in the middle of this year.
The open-pit mine at Oyu Tolgoi has been in operation since 2013 and produces around 200,000 tonnes of copper a year. This could rise to 500,000 tonnes annually by 2027, as most of the mine’s reserves lie deeper underground. The site also produces gold as a by-product.
First production from the underground, which has an average copper grade of 1.66 per cent, more than three times higher than the open pit, is expected in 2020,” the statement said, adding that when the underground is fully ramped up in 2027, Oyu Tolgoi is expected to produce more than 500,000 tonnes of copper a year compared with current annual production of 175,000-200,000 tonnes.
The mine also benefits from significant gold by-products, with an average gold grade of 0.35 grams per tonne.
“Long-term copper fundamentals remain strong and production from the Oyu Tolgoi underground will commence at a time when copper markets are expected to face a structural deficit…This is a long-term partnership, built to create mutual benefit.” Rio Tinto deputy chief executive Jean-Sébastien Jacques said.
The open-pit mine at Oyu Tolgoi was completed on schedule in less than 24 months and production started in 2013. Since then, more than 440,000 tonnes of copper have been sold, the statement said.