Rio invests in Mongolian copper project

Panorama

Publishing Date: 06 Oct 2009 4:04pm GMT
Author: Mining Magazine

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Rio Tinto has signed an investment agreement with the Mongolian Government for the development of the Oyu Tolgoi copper-gold complex in the South Gobi region in conjunction with Ivanhoe Mines Ltd. Mine development will commence shortly with production scheduled to start in 2013. A five year ramp up phase will take the mine to its full expected production of 450,000t/y of copper and 330,000oz/y of gold.

Bret Clayton, CEO of Rio Tinto Copper and Diamonds said: “While the size and grade of the existing Oyu Tolgoi ore reserves and mineral resources are already world class, we are also excited by the significant exploration opportunity that remains. We plan to be a partner here in Mongolia for decades to come.”

Under the terms of the agreement the Government of Mongolia will own 34% of Ivanhoe Mines Mongolia Inc LLC, the license holder of the Oyu Tolgoi project. Rio Tinto initially made a US$303 million investment in a 9.95% shareholding in Ivanhoe Mines Ltd in October 2006 and has the obligation to invest a further US$388 million for another 9.95% at the conclusion of an unconditional investment agreement with the Mongolian government.