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Oyu Tolgoi announces fourth quarter 2020 performance results www.montsame.mn
On February 1, 2021, Oyu Tolgoi released its latest performance scorecard, highlighting key 2020 performance metrics, providing an update on the underground development, and its ongoing COVID-19 mitigation measures. The updated 2020 Performance Scorecard can be viewed here.
Oyu Tolgoi has contributed US$11.6 billion of in-country spend between 2010 and 2020, and paid US$294 million in taxes, fees and other payments in 2020. Since 2010, Oyu Tolgoi has paid US$2.9 billion in taxes, fees and other payments, including VAT to Mongolian suppliers.
Oyu Tolgoi chief executive officer, Armando Torres, said, “Oyu Tolgoi has delivered strong results in 2020, building on a solid safety, environmental, and operational performance. We have also advanced the underground mine development, and exceeded our copper and gold production guidance. All these results were achieved while managing the challenging market conditions and COVID-19 pandemic. Oyu Tolgoi is proud to deliver these achievements together with our employees, communities, contractors, suppliers and shareholders”.
In 2019, Oyu Tolgoi’s open pit operations continued uninterrupted and partnered with 770 suppliers in 2020, including 499 national businesses, accounting for 72 per cent of the total operations procurement spend. The company maintained excellent water-conservation practices, achieving the highest water use efficiency rates per tonne of ore production, using 0.37 cubic meters of raw water per tonne of ore processed compared to our target of 0.55 cubic meters. Achieved an average water-recycling rate of 87.7 per cent, compared to a target of 80 per cent.
The underground lateral development has now reached 53,000 equivalent metres (eqm), with development for the first drawbell substantially complete. The project has now exceeded one million tonnes of material moved through Shaft 2 since commissioning. Scheduled annual maintenance of the shaft was successfully completed in October using remote technology.
Shaft 4 is now out of care and maintenance and the focus is on completing all construction and commissioning activities for load testing and verification, and for sinking to commence in early 2021. Shaft 3 remains on care and maintenance, with some minor construction.
On 16 December, Rio Tinto confirmed the definitive cost and schedule estimate for Panel 0 with first sustainable production expected to commence in October 2022, and development capital of US$6.75 billion, in line with previously announced ranges. At peak production, Oyu Tolgoi is expected to operate in the first quartile of the copper cash cost curve and, by 2030, is expected to be the fourth largest copper mine in the world.
It is expected to produce 480,000 tonnes of copper per year on average, from 2028 to 2036, from the open pit and underground. The underground Ore Reserve has an average copper grade of 1.52 per cent, which is more than three times higher than the open pit Ore Reserve, and contains 0.31 grammes of gold per tonne.
Rio Tinto reported it has been engaging with the Government and Turquoise Hill Resources (TRQ) in good faith on items raised in Resolution 92 passed by the Mongolian Parliament in December 2019, and remains open to improving the UDP to increase the benefits of Oyu Tolgoi for all shareholders.
In accordance with Mongolian regulation, the Government of Mongolia is required to review and register the updated Resources and Reserves submitted in February 2020, and accept the updated feasibility study (OTFS20) completed in July 2020.
The OTFS20, together with the updated definitive estimate, forms the basis for the uplift in the overall project budget that requires approval from all shareholder representatives on the Oyu Tolgoi Board prior to the depletion of the previous budget and the under-cut decision.
Rio Tinto reported it remains committed to implementation of the funding plan in the Memorandum of Understanding (MOU) agreed with TRQ in September 2020.
All parties continue to work together to achieve key power milestones including an extension of existing power supply arrangements by 1 March 2021, and the signing of a power purchase agreement (PPA) with the state-owned power company for domestic power supply by 31 March 2021. In October 2020, the Mongolian Ministry of Energy (MoE) established a Working Group to negotiate the PPA with Oyu Tolgoi, who will continue to work with the government and the MoE Working Group to agree on an outcome that will ensure secure, stable and reliable long-term power supply to the mine.
To see more details on the operational and production and underground development update, production data and other timely updates, visit Oyu Tolgoi's webpage here.
Published Date:2021-02-01
