Oyu Tolgoi LLC has completed an updated feasibility study, which includes a redesign of Panel 0 of the Hugo Dummett North underground mine at the Mongolia site. The new design confirms an increase of $1.3 billion to $1.8 billion from Rio Tinto’s original $5.3 billion development capital.

RioTintoThe new design also confirms that the caving method of mining remains valid, and a delay of 21 to 29 months for first sustainable production compared to the original feasibility study guidance in 2016. Detailed study, design, engineering and optimisation work is ongoing to support the definitive estimate of Panel 0 for the development of Oyu Tolgoi, which remains due in the second half of 2020.

Upon completion of the underground mine, Oyu Tolgoi will serve as the world’s third-largest copper mine.

Arnaud Soirat, Rio Tinto chief executive of Copper & Diamonds, said, “This amended mine design is another positive step in the development of the underground mine which will unlock the most valuable part of Oyu Tolgoi. We remain focused on delivering the underground project safely and within the guidance ranges we have announced on both cost and schedule.”

The updated mine design is the result of the review announced by Rio Tinto in July 2019 when enhanced geotechnical and geological information obtained from drilling and mapping at depth suggested there may be some stability risks associated with the original mine design. The updated design retains two in-situ rock pillars on either side of Panel 0 for geotechnical stability. In the original mine design, these pillars were within the mining area. The updated design is supported by extensive geotechnical modelling and industry leading technical assurance.

As a consequence of leaving the pillars in place, the material contained in the pillars has been reclassified from Ore Reserves to Mineral Resources. It is expected that part of the material contained in these pillars will be recoverable at a later stage following additional studies which are currently underway.

Ore handling infrastructure will be relocated to the pillars, located immediately north and south of the current Panel 0 boundaries. Panels 1 and 2 will now be initiated as independent panels or mine blocks.

Optimisation of mine designs for Panels 1 and 2 is ongoing and it is anticipated that this next phase of study may result in further movements in classifications of Ore Reserves and Mineral Resources.

Oyu Tolgoi is jointly owned by the government of Mongolia, which has 34 per cent ownership, and Turquoise Hill Resources, which owns 66 per cent. Rio Tinto owns 50.8 per cent of Turquoise Hill Resources and manages the operation on behalf of the owners.