The Mongolian government is considering terminating and replacing the development and financial plan for the Oyu Tolgoi copper mine in the country, Turquoise Hill Resources said. Mining company Rio Tinto owns 51pc of Turquoise Hills Resources.
The government intimated Rio Tinto its dissatisfaction with the miner’s planned expansion cost of $6.7bn, which rose by $1.5bn from earlier estimates. Turquoise Hill owns 66pc stake, while the Mongolian government holds 34pc stake in the project. Last month, Rio Tinto said production from the mine is expected to begin in October 2022, after initially announcing production to start in the first quarter of 2021.
Turquoise Hill has been facing pressure from government authorities seeking an independent review into delays and cost blowouts in the expansion project.
Oyu Tolgoi copper and gold mine is located in the South Gobi region of Mongolia. Last year, Turquoise Hill produced 146,300mt copper from the Oyu Tolgoi deposits, while post the expansion of Oyu Tolgoi underground mine, the company expects average annual production to exceed 550,000mt from 2025 to 2030. In Q3 FY2020, copper production was 36,300mt.