Turquoise announces start of operations at Oyu Tolgoi mine

21 December 2014 (Last Updated December 21st, 2014 18:30)

Turquoise Hill Resources, a majority-owned subsidiary of Rio Tinto, has started operations at the Oyu Tolgoi mine, located in the Gobi region of Mongolia.

Oyu Tolgoi

Turquoise Hill Resources, a majority-owned subsidiary of Rio Tinto, has started operations at the Oyu Tolgoi mine, located in the Gobi region of Mongolia.

SAG mills and three of four ball mills at the mine are operating and repairs to the concentrator's damaged cyclone pack are progressing well, with completion expected in three to four weeks.

The company stopped work on the concentrator following a fire in one of the ball mill cyclone packs on 3 December, which originated at the rubber-lined pipes and launders of the cyclone pack.

For 2015, production from Oyu Tolgoi is expected to be 175,000t to 195,000t of copper and 600,000oz to 700,000oz of gold in concentrates.

Minor differences in the mine schedule and design because of timing have contributed to the variance in volume.

"Oyu Tolgoi's deposits contain an estimated 2,700,000t of copper."

According to the company, operating cash costs are expected to be approximately $900m and capital expenditure is expected to be $230m, of which around $185m relates to sustaining capital.

Oyu Tolgoi, a combined open pit and underground mining project, is being developed as a joint venture between Turquoise Hill Resources, which has 66% ownership, and the Mongolia Government, which owns 34%.

Financing for the project has come from the Rio Tinto Group and an investment agreement between Ivanhoe Mines and the Mongolia Government.

Oyu Tolgoi's deposits contain an estimated 2,700,000t of copper and 1.7 million ounces of gold.

Production at the mine, which has an anticipated lifespan of 50 years, began in 2013 and is scheduled to reach full capacity in 2021.


Image: Oyu Tolgoi mine in south Gobi. Photo: courtesy of Brücke-Osteuropa.