Rio Tinto, Turquoise Hill Resources and the Mongolian government have reached an agreement that will move the Oyu Tolgoi project forward, resetting the relationship between the partners and increasing the value the project delivers for Mongolia.

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As part of the deal, Turquoise Hill will waive the $2.4 billion in debt owed to it by the Mongolian government. 

Commencement of underground operations will begin soon, unlocking the most valuable part of the copper-gold mine. Until sustainable underground production is achieved – expected in the first half of 2023 – Oyu Tolgoi will be funded by cash on hand and rescheduling of existing debt repayments, together with a prepaid copper concentrate sales agreement with Turquoise Hill.

Furthermore, the Oyu Tolgoi Board has approved the signing of an Electricity Supply Agreement to provide the operation with a long-term source of power from the Mongolian grid, under terms already agreed upon with the Mongolian government. Rio Tinto will also work with the government to support long-term renewable energy generation to the grid. 

Rio Tinto said the Oyu Tolgoi mine is expected to be the fourth largest copper mine in the world by 2030, producing an average of 500,000 tonnes of copper between 2028 and 2036 from the open pit and underground operations.

Source: Rio Tinto