Rio Tinto has reportedly agreed a $4.2bn financing deal to expand its Oyu Tolgoi copper mine in South Gobi, Mongolia.
As part of its plans for the $5.4bn Oyu Tolgoi mine expansion, the company will build more than 200km of tunnels to access ores at the deposit during next five to seven years.
Following the expansion, the mine’s lifespan is expected to extend past 2100.
In May, the company reached a deal with the Mongolian Government for the expansion of the underground mine at Oyu Tolgoi.
Rio Tinto Copper and Coal chief executive Jean-Sébastien Jacques had then said: "Our joint announcement reflects tremendous leadership by all parties and paves the way for work to resume on the underground development, which is expected to deliver significant value to shareholders.
"The resolution of the outstanding issues reinforces the principles of the investment agreement signed in 2009, which underpinned the $6bn invested in Oyu Tolgoi to date, and provides a clear and stable framework for the future."
The combined open-pit and underground mining project Oyu Tolgoi mine is located within the south Gobi Desert, 235km east of the Ömnögovi Province capital Dalanzadgad.
Discovered in 2001, the site is being developed as a joint venture between Turquoise Hill Resources, which is a majority-owned subsidiary of Rio Tinto with 66% ownership and the Government of Mongolia with 34% stake.
The mine began construction as of 2010 and is expected to account for more than 30% of the country’s gross domestic product upon completion.
Image: Number 1 Shaft at Oyu Tolgoi. Photo: courtesy of Brücke-Osteuropa.