Rio Tinto to start shipping from Oyu Tolgoi on June 14
Rio Tinto announced that it plans to begin exporting copper from the $6.2-billion Oyu Tolgoi mine in Mongolia on June 14, Reuters reported.
The mine will eventually make up one-third of the country’s economy.
Oyu Tolgoi, run by Rio Tinto, is a crucial source of growth for the company as it looks to ease its dependence on iron ore and cast off small or unprofitable assets.
The start of shipping from Oyu Tologi, which has been in production since February, is particularly important now as the company’s Bingham Canyon Mine in Utah was shut by a landslide in April and its 40 percent owned Grasberg Mine in Indonesia has been shut following an accident in May.
Rio Tinto said that it would not start shipping until it resolved disputes with the Mongolian government over royalties, costs, management fees, and project financing. Seeking Alpha.com reported that while Rio Tinto has not issued any statements to announce the resolution of these disputes, the commencement of shipping is an indicator that all major issues have been sorted out.
Metals traders are eager to hear if Rio Tinto has won official approval to export concentrate from Oyu Tolgoi amid the shortfall in shipments from the crippled Grasberg mine, run by Freeport McMoRan Copper & Gold.
Rio Tinto declined to comment on the Oyu Tolgoi event. Its subsidiary, Turquoise Hill Resources Ltd, owns a stake of 66 percent in the mine, with the Mongolian government owning the remainder.
The start-up of Oyu Tolgoi has been seen as a crucial test to revive foreign investment in Mongolia’s vital mining sector, which slumped last year after the government moved to tighten investment regulations and sought a bigger stake in Oyu Tolgoi.
In the first 10 years, annual output at Oyu Tolgoi is expected to average 330 kt/a (363,000 stpy) of copper and 15.4 t/a (495,000 oz/year) of gold.
Rio Tinto is close to securing financing for a $5 billion-plus underground expansion of the mine.