Ulaanbaatar, Mongolia – Oyu Tolgoi today announced an update on its performance for the quarter ended September 30, 2018.

Oyu Tolgoi’s workforce reached 17,000 making it the largest private employer in Mongolia. At the end of the third quarter, 93 per cent of Oyu Tolgoi’s employees were Mongolian, 19.4 percent of which were from the Umnugovi province and 53.9 per cent were underground workforce.

As of the end of the third quarter of 2018, Oyu Tolgoi achieved an All Injury Frequency Rate (AIFR) of 0.19 per 200,000 hours worked and was injury-free for 83 out of 92 days for the three months ended September 30, 2018.

Oyu Tolgoi paid US$1.6 billion in taxes, fees and other payments to the Government of Mongolia between 2010 and the third quarter of 2018 including US$152 million in the first three quarters of 2018.

Underground update

Second annual re-forecast shows the capital cost of the underground project remains on track, first draw bell is on schedule for mid-2020 and the project remains on schedule to complete by 2022. The re-forecast did indicate that there may be a delay in sustainable first production from the first quarter of 2021 to late in the third quarter 2021 due to difficult ground conditions and challenges in the construction of Shaft 2.

Oyu Tolgoi maintained its world-class environmental performance in this quarter, with only 0.35 cubic metres of water per tonne of ore processed – three times less, compared to similar operations worldwide - and achieving an average water recycling rate of 89 per cent over the period.

Education and training are major focus areas for Oyu Tolgoi. Delivering our vision to create enduring value, knowledge and skills, Oyu Tolgoi provided 215,503 man hours of training to nearly 10,301 employees and contractors in the third quarter of 2018.

Oyu Tolgoi collaborated with 793 suppliers in the first three quarters of 2018, 562 of which are national businesses that account for 79 per cent of total operations procurement spent. Between 2010 and the third quarter of 2018, Oyu Tolgoi spent US$2.6 billion on national procurement of which US$379 million was spent on procurement from Umnugovi suppliers.

Q3’18 Production report

Third quarter mill throughput decreased 5.0 per cent over Q2’18 due to increased processing of harder Phase 4 ore as well as a planned maintenance shutdown during the quarter. Copper production was flat over Q2’18 as higher grades and recoveries were partially offset by lower throughput. Gold production increased 54.0 per cent over Q2’18 due to higher grades and recoveries. Third quarter sales volumes were impacted by torrential rain in July and August, which consequentially affected Chinese road and rail availability. Additionally, Q3’18 sales volumes were generally lower than Q2’18, which benefited from the sales of deferred volumes related to the Q1’18 force majeure.

Turquoise Hill has updated Oyu Tolgoi’s expected copper production for 2018 from between 125,000 and 155,000 tonnes of copper to between 140,000 to 155,000 tonnes of copper in concentrates. The company continues to expect production of gold in concentrates from between 240,000 and 280,000 ounces for 2018.

Published Date:2018-10-31