Mongolia has asked its partner Rio Tinto to stay within an estimated $7.06 billion budget for the Oyu Tolgoi copper and gold mine’s underground expansion, reported Reuters.
The project is behind schedule and over budget with costs ballooning from an original estimate of $5.3 billion in 2016. Last year, Rio Tinto agreed to waive $2.4 billion in debt owed to it by the Mongolian government and commit to a structure that did not require additional loan financing.
"The government has asked Rio Tinto to not increase the budget," J. Ganbaatar, the minister for Mining and Heavy Industries, told Reuters.
Ganbaatar added that he expects first production from the underground mine by mid-2023. The facility, Rio's biggest copper growth project, began open-pit mining in 2011.
Rio Tinto owns a 66% interest in the Oyu Tolgoi complex in the South Gobi region of Mongolia with Mongolia owning the remaining 34%. The mine is slated to eventually produce more than 500,000 tonnes of copper a year.