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Rio Tinto warns of Oyu Tolgoi Blow-Out Amid Slow Quarter in Mongolia

Mining News - Published on Thu, 18 Jul 2019

Image Source: Mining Global
Rio Tinto warned of costs blow-outs and delays to its Oyu Tolgoi underground project, in Mongolia. The miner that capital spend to bring the copper project into production was expected to range between USD 6.5-billion and USD 7.2-billion, an increase of between USD 1.2-billion and USD 1.9-billion compared with the previous cost estimate of USD 5.3-billion. In addition to the cost blow-out, Rio has also warned that first sustainable production from Oyu Tolgoi would only be achieved between May 2022 and June 2023, which was between 16 and 30 months later than the original feasibility study guidance in 2016.

Rio is considering a number of mine design options for the Oyu Tolgoi project, after enhanced geotechnical information and data modelling suggested that there could be stability risks with the previously approved mine design. These options are being evaluated to determine the final design of the first panel of mining, ‘Panel 0’ and this work is anticipated to continue until early 2020.

The miner noted that given the further technical work which was needed, the definitive estimate, which would include the final estimate of cost and schedule for the remaining underground project, was now expected to be delivered in the second half of 2020, reflecting the preferred mine design approach.

Mr Stephen McIntosh, Rio’s group executive for growth and innovation, said that “We have made significant progress on a number of key elements in the construction of the underground project during 2019. However, the ground conditions are more challenging than expected and we are having to review our mine plan and consider a number of options.”

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Posted By : Sanju Moirangthem on Thu, 18 Jul 2019
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