New hold-up for Rio’s subsidiary Turquoise Hill at Oyu Tolgoi
Shares in Turquoise Hill Resources (TSE, NYSE:TRQ) showed little reaction to the company’s latest setback at its flagship Mongolian Oyu Tolgoi copper mine, when one of its two tailings thickeners experienced rake failure last Friday.
Vancouver-based Turquoise Hill, controlled by Anglo-Australian giant Rio Tinto (LON, ASX:RIO), said Tuesday an investigation was under way to determine the cause of the failure and that repairs at the mine had begun.
The company is currently embroiled in a tax dispute with the Mongolian authorities over a $130 million bill delivered in June.
The battle is the latest in a series of hurdles facing the Oyu Tolgoi project since Rio Tinto suspended work on the $5.1 billion underground expansion of the mine, where 80% of the resources are located, and fired about 300 workers.
In April, Turquoise Hill said potential lenders have extended a deadline to arrange financing for the project until the end of September.
The miner said its concentrator at Oyu Tolgoi continued to operate at about a 60% production rate using the second thickener, adding it would update the market as additional information becomes available.
For 2014, Oyu Tolgoi is still targeting production of 150,000 to 175,000 tonnes of copper in concentrates and 700,000 to 750,000 ounces of gold in concentrates. But after phase 2 the mine in the southern Gobi desert close to the Chinese border could produce more than 1.2 billion pounds of copper, 650,000 ounces of gold and 3 million ounces of silver each year.
Oyu Tolgoi will account for 30% of the economy of the nation of just over 3 million people.