Oyu Tolgoi’s first international copper, gold shipment on its way to China
The first international copper and gold shipment from Rio Tinto’s (ASX, LON:RIO) $11 billion Oyu Tolgoi mine in Mongolia is finally on its way to China after a three-month bureaucratic hold-up at the border between the two nations.
According to FT.com (pay wall), the customs impasse was caused by the fact that the border crossing in the Gobi desert, where the concentrate enters China, can only handle trade between Chinese and Mongolian companies, but one of the parties on the contracts is from a third country.
The news, expected to be confirmed at some point Monday according to The Australian, means that Oyu Tolgoi’s operator Turquoise Hill (TSX:TRQ), a Canadian miner 51% -owned by Rio, can now start booking revenue from the huge copper and gold project.
Rio still faces challenges, as it restarted negotiations with the government of Mongolia over the $6 billion underground phase of the mine only last week. The development has been on hold because of problems finalizing an investment agreement with Mongolia, which wants improved terms over those agreed in 2009 for the first phase.
Oyu Tolgoi, which began producing in July, is set to contribute as much as a third of the nation's economy if the second phase underground expansion were to go ahead, with the final bill for the project pegged at as much as $14 billion.
At full tilt, the mine is set to produce more than 1.2 billion pounds of copper worth over $4 billion at today's prices, 650,000 ounces of gold ($800 million) and 3 million ounces of silver (under $100 million) each year.
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