Mongolia is concerned about Rio Tinto’s management of Oyu Tolgoi – n7t

Mongolia is anxious Rio tinto Authorities officers informed CNBC in regards to the administration of the Oyu Tolgoi copper and gold mines within the Gobi Desert within the southern a part of the nation.

“We’re involved about transparency, and we’re additionally involved about whether or not the mine is working effectively.” Solongoo Bayarsaikhan, Deputy Secretary of the Cupboard Secretariat of the Mongolian Authorities, mentioned on CNBC’s “Squawbox Asia.. “

NS Open pit mining The underground mining venture is being collectively developed by the federal government, which owns roughly 34% of Oyu Tolgoi, and Rio Tinto’s Canadian subsidiary. Turquoise hill resource It has a 66% stake.

British Australian miners personal an almost 51% stake in Turquoise Hill Assets.

What’s unsuitable?

Underground enlargement of Oyu Tolgoi has been hampered by delays, growth points and price overruns for years.

Rio Tinto and Turquoise Hill Assets Signed development and financing plans with Mongolia In 2015, which supplied the premise for funding the venture, however six years later, manufacturing has not but begun in a sustainable method.

When the underground enlargement is full, Oyu Tolgoi is predicted to supply greater than 500,000 tonnes of copper yearly.

Preliminary predictions are that the mine From 2021 onwards, copper will be able to be produced sustainably..

Nevertheless, in December final 12 months, Rio Tinto postponed the timeline, stating that “sustainable manufacturing” is scheduled to start in October 2022. Underground expansion costs $ 6.75 billion, Increased than earlier estimates.

Friday, Rio Tinto Delayed that prediction again He mentioned sustainable manufacturing would happen “by January 2023.”

The corporate cited the influence of Covid-19 and open points concerning cave exploration. He warned that this 12 months’s extra Mongolian Covid restrict to deal with neighborhood communication was set so as to add an estimated $ 140 million to the funds as of the top of September.

Rio Tinto blamed tough floor situations delays and rising prices, however this 12 months’s impartial evaluation contradicted that clarification.

On September 22, 2018, staff will move via a tunnel in an underground mining venture on the Oyu Tolgoi Copper Gold Mine, co-owned by the Rio Tinto Group’s Turquoise Hill Useful resource Unit and the state-owned Eldenes Oyu Tolgoi in Khanbogd, Mongolia.

Taylor Wademan | Bloomberg | Getty Photos

A report from the Unbiased Consulting Group commissioned by Rio Tinto’s companions on the venture concluded that poor administration was the primary cause for the mine’s underground enlargement being delayed by virtually two years and exceeding its funds by $ 1.45 billion. .. Reported Financial Times..

Mongolia reacts

Rio tinto Reportedly disputed the report’s findings In a letter to the Mongolian Minister of Justice, the evaluation acknowledged that it was not absolutely conscious of the total influence of weaker situations that pressured the mine to be redesigned.

“We requested Rio Tinto to elucidate the contradiction between the impartial evaluation report and Rio Tinto’s place,” Bayar Saikan informed CNBC on Friday.

“The letter is happy with the solutions to our particular questions and particular issues about why there are price overruns and deliberate delays, and why the impartial evaluation experiences have very completely different conclusions. It wasn’t a very good factor, “she mentioned. “Rio Tinto didn’t present sufficient solutions.”

Bayarsaikhan defined that the Mongolian authorities desires to search out “mutually useful options” and keep away from additional surprises when it comes to additional price will increase and delays.

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