Oyu Tolgoi resumes copper shipments to China
Canada’s Turquoise Hill Resources (TSX, NYSE:TRQ), which is 51% owned by Rio Tinto and holds two-thirds of the massive Oyu Tolgoi copper-gold mine in Mongolia, said Wednesday it had resumed concentrate shipments from the operation to China.
The Vancouver-based miner said that after two weeks of talks with Mongolian and Chinese authorities, Oyu Tolgoi has been allowed to restart shipping ore across the border, but it will follow a new joint coal and concentrate crossing route at the border between the two nations.
Oyu Tolgoi — located in Mongolia’s remote southern Gobi desert, close to the country’s border with China — is expected to produce 560,000 tonnes of copper per year, along with gold and silver by-products.
Production at the mine, expected to reach 560,000 tonnes of copper per year once at full tilt, was unaffected during suspension, Turquoise Hill said.
Rio Tinto approved in May a $5.3 billion expansion of Oyu Tolgoi, one of the world's largest copper mines and a key component of the company’s master plan to become less dependent on iron ore for profits and become one of the world’s biggest copper producers.
The planned expansion, with its nearly 200 km (125 miles) of underground tunnels that will track three times as deep as the Empire State Building is tall, will more than double the copper output from Oyu Tolgoi, which is mostly sent south to China, the world’s main metals consumer.
It is also expected to help Rio and Turquoise Hill get to the most valuable part of the deposit, which also contains gold and silver, and where there has been a open pit mine running since 2013.
First production from the extended underground area is expected by 2020, when a shortage of copper is tipped to emerge. Full ramp up is slated for 2027.