Rio Tinto confirms development capital and timeline for Oyu Tolgoi underground

Rio Tinto today unveiled a pathway for the ongoing development of the underground project at Oyu Tolgoi in Mongolia, one of the largest known copper and gold deposits in the world. The definitive estimate details how Oyu Tolgoi underground will achieve sustainable production for Panel 0 by October 2022 for development capital of $6.75 billion.

Rio Tinto and its partners, the Government of Mongolia and Turquoise Hill Resources (TRQ), need to continue to work together to finalise three other milestones – the outstanding government approvals, funding and a power solution – in order to ensure that the project can commence caving operations in 2021. This will unlock the most valuable part of Oyu Tolgoi, delivering significant benefits for the shareholders of Oyu Tolgoi and the people of Mongolia.

At peak production, Oyu Tolgoi is expected to operate in the first quartile of the copper cash cost curve1 and by 2030 is expected to be the fourth largest copper mine in the world.

Oyu Tolgoi is expected to produce 480,000 tonnes2 of copper per year on average from 2028 to 2036 from the open pit and underground, compared with 146,300 tonnes3 in 2019 from the open pit. The underground Ore Reserve has an average copper grade of 1.52 per cent, which is more than three times higher than the open pit Ore Reserve, and contains 0.31 grammes per tonne of gold.4 The size and quality of this Tier 1 asset provides additional expansion options, which could see production sustained for many decades.

Arnaud Soirat, Chief Executive of Copper & Diamonds said, “We now have a pathway to bring the underground project into production, which will unlock the most valuable part of Oyu Tolgoi. We will continue to work together with the Government of Mongolia and TRQ to progress the project, including finalising all necessary approvals and agreeing a solution on power and funding.”