Oyu Tolgoi May Start Earlier Than Planned, Executive Says
The Oyu Tolgoi copper and gold project operated by Rio Tinto Group and Ivanhoe Mines Ltd., together with the Mongolian government, is likely to start operations earlier than expected, an executive said.
The project, one of the largest untapped sources of copper and gold globally, according to Ivanhoe, will be on line from August 2012, Temuulen Ganzorig, deputy director of Erdenes MGL LLC, Mongolia’s state-controlled mining company, said in Singapore today. Oyu Tolgoi was due to start before the end of 2012.
“The timetable is a bit earlier than expected due to expedited construction,” Ganzorig said at the Asian Mining Congress. Erdenes, which represents the nation’s 34 percent interest in Oyu Tolgoi, is in talks with Rio and Ivanhoe on project financing, he said.
Ivanhoe Mines Chief Executive Officer Robert Friedland said last month that “large elements” of Oyu Tolgoi are ahead of schedule, though it did not mean the whole development would be. The budget for the project is close to $2.5 billion this year and the workers at the site will rise to 18,000 by June, Friedland told a Hong Kong conference.
Oyu Tolgoi holds estimated resources of 37 million metric tons of copper and 1,300 tons of gold, allowing the mine to operate for almost 60 years, Rio said in December. Mongolian President Tsakhiagiin Elbegdorj said in 2009 that the project may operate for 30 years and generate $30 billion to $50 billion of revenue.
Oyu Tolgoi, which means “turquoise hill” in Mongolian, lies about 80 kilometers (50 miles) north of the Chinese border. The mine will produce an average 1.2 billion pounds of copper and 650,000 ounces of gold a year for the first decade, according to Ivanhoe.
--Xiao Yu in Singaore and Yuriy Humber in Tokyo. Editors: Alan Soughley, Indranil Ghosh
To contact Bloomberg News staff for this story: Yuriy Humber in Tokyo at +81-3-3201-3521 or yhumber@bloomberg.net; Xiao Yu in Singapore at +86 1390 117 2363 or yxiao@blooomberg.net
To contact the editor responsible for this story: Andrew Hobbs in Sydney at ahobbs4@bloomberg.net
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