Rio Tinto Says Mongolia Copper Production May Start in SummerMatt Craze and Jesse Riseborough
Rio Tinto Group is aiming to start commercial production at its Oyu Tolgoi copper project in Mongolia in the northern Hemisphere summer as talks advance with the government on permitting.
Rio Tinto is in a “clarification” process with the government over the project that will be built over two stages, Jean-Sebastien Jacques, head of the London-based company’s copper unit, said yesterday in an interview in Santiago.
Oyu Tolgoi, whose development costs and schedule have been the subject of debate in Mongolia, is the primary driver of the country’s $10 billion economy and by 2020 is expected to make up one-third of Mongolia’s gross domestic product. Rio controls 66 percent of the $6.6 billion project with the remainder controlled by the government.
“Subject to ongoing support from the government we are cautiously optimistic that we will have first commercial production during the summer,” Jacques said. “There is no dispute whatsoever as we speak.”
The mine in the South Gobi desert is operating on a month-to-month budget and requires approval from the board of directors. The board agreed on March 29 to continue to fund the project through April, Mining Minister Davaajav Gankhuyag said.
Rio is positive on long-term prospects for the copper market as China and developed nations continue to demand more of the metal used in power cables and electrical wire and new supply faces mounting challenges, Jacques said.
“People throughout the world want to have iPads and iPhones and you need lots of copper to do so,” he said.