Turquoise Hill confirmed that the Oyu Tolgoi LLC board of directors has approved a bridging budget of $75 million to continue critical activities at the Oyu Tolgoi underground mine development project in southern Mongolia.
The approval reflects the progress made during recent negotiations between Turquoise Hill, the Mongolian government and Rio Tinto about the expansion of the Oyu Tolgoi copper-gold mine, which has been subject to delays and ballooning costs.
Turquoise Hill said it expects that the approved increase should be sufficient to sustain work on the development of the underground project up to mid-January 2022.
The Canadian miner believes the bridging budget approval was a necessary and positive step in the near term. However, it cautions that there is no guarantee the board will approve future investments, and “accordingly [Oyu Tolgoi] LLC remains at risk of having to slow down further work on the underground development.”
Turquoise Hill’s ownership of the Oyu Tolgoi mine is held through a 66% interest in Oyu Tolgoi LLC; the remaining 34% is held by Erdenes Oyu Tolgoi LLC, a Mongolian state-owned entity.
Rio Tinto has a 50.8% interest in Turquoise Hill and manages the operation on behalf of the owners.