Government of mongolia to finance tavan tolgoi power plant. The company said it would update the market in due course. The ebrd is considering a project involving the development, construction and operation of a mine and ore processing facility at the oyu tolgoi copper, gold, silver and molybdenum deposit located in the southern gobi region of mongolia. Executive summary an overview of oyu tolgoi phase 2 mining plans and some of the issues and risks associated with block cave underground mining, international metal price uncertainty. Jul 19, 2019 mongolia will vote in august to rip up parts of an investment agreement with rio tinto for the oyu tolgoi copper mine, which may force the miner to make concessions in a project beset by delays. If we use current prices project economics are significantly worsened, though the underground mine development remains viable on a forward looking basis. Oyu tolgoi is one of the largest known copper and gold deposits in the world. Oyu tolgoi also produced 281,840 ounces of gold and 866,000 of ounces silver. Covid19 puts brakes on rios oyu tolgoi project mining. Oyu tolgoi is a worldclass coppergold asset and its further development is of great economic significance for mongolia. Sep 22, 2014 further underground development is subject to resolution of shareholder issues, approval of the feasibility study by oyu tolgoi s shareholders and the mongolian minerals council, agreement of a comprehensive funding plan including project finance, and receipt of all necessary permits. Rio tinto says it remains confident in the longterm prospects for copper, as it pushes ahead with a multibilliondollar expansion of its key oyu tolgoi mine.
Oyu tolgoi llc is located in mongolias south gobi region. Oyu tolgoi is a worldclass, highgrade copper and gold deposit supporting a. The oyu tolgoi mine, located in the southern gobi region, is mongolias. Oyu tolgoi funding puzzle shows rio tinto between a rock. The underground expansion of oyu tolgoi is rios most important growth project and will increase its production of copper at a time when the shift to. This phd research project focused on the volcanostratigraphic framework and magmatic evolution of the oyu tolgoi porphyry cuau district in mongolia. Fearing pressure by the company and the local government officials, we do not wish our identity to be disclosed for security reasons and request confidentiality. Copper demand from evs and evrelated infrastructure. Nomadic households live one by one in remote areas. Jigjid, andrew woodley, ceo oyu tolgoi, batsukh galsan chairman of the board of directors, oyu tolgoi, and key representatives of the lender organizations participating.
Rio tinto progresses oyu tolgoi power options morningstar. Jacobs wins epcm contract for oyu tolgoi underground project. Ulf quellmann, ceo of turquoise hill, is in mongolia actively working on this matter with the oyu tolgoi llc team as well as rio tinto. Rio tinto under fire as mongolia presses for mine deal. Anton rhling program manager oyu tolgoi financial model.
Oyu tolgoi is one of the worlds largest new coppergold mines and is located in the south gobi region of mongolia, approximately 550 km south of the capital, ulaanbaatar, and 80 km north of the mongoliachina border. Rio tinto slows expansion of oyu tolgoi copper mine in. Measures put in place by mongolias government to contain the spread of covid19 have slowed progress on the underground development of rio tintos oyu tolgoi project, although openpit. Oyu tolgoi has the potential to operate for approximately 100 years from five known mineralized deposits. The development of the underground mine at oyu tolgoi has been approved, marking the beginning of the next phase in the development of this worldclass resource. The survey will test oyu tolgoi s copper and gold mineralised trend. Partner in world class oyu tolgoi underground coppergold.
Mining taxes the case of oyu tolgoi and profitable tax avoidance by rio tinto in mongolia january 2018 oyu tolgoi watch ulaanbaatar, 46a mongolia t. A signing ceremony for the oyu tolgoi underground project finance package was held in ulaanbaatar, mongolia on 16 december 2015. Ifc support for oyu tolgoi international finance corporation. We are building an underground mine complex, using blockcaving mining techniques to extract the ore and transport it to the surface. On february 28th, 20, migas board of directors approved migas proposed support for this project. Ceo of turquoise hill is in mongolia actively working on.
An overview of project finance and infrastructure finance. Project complaints mechanism, eligibility assessment report request no. Oyu tolgoi project and will likely be subject to further harm as the project goes forward. The operating costs are based on the designs of the mines and plant in idop.
Mongolia lawmakers seek to rewrite oyu tolgoi deal reuters. This follows canadian stock exchange rules and shows positive project economics from 2015 forward as the basis for. Unofficial translation vicepresident, compliance advisor. Mongolia refuses to support rio tinto financing effort for. Drill core logging, field mapping, geochronology and geochemistry were used to constrain the stratigraphy, structure, timing and origin of the worldclass cuau deposits in the south gobi desert. On 22 april, 2015 oyu tolgoi llc, umnugobi aimag, khanbogd soum and other partner communities of umnugobi aimag entered into a cooperation agreement. View oyu tolgoi project fiscalmodelnarrativereport. Oyu tolgoi is owned 66% by turquoise hill resources and 34% by the government of mongolia. This environmental and social impact assessment esia is based on the initial construction of an open.
Coronavirus further slows oyu tolgoi measures put in place by mongolias government to contain the spread of covid19 have slowed progress on the underground development of rio tintos oyu tolgoi project, although openpit operations continue, the major said on monday. The oyu tolgoi ot project, located approximately 550 kilometers south of mongolias capital city of ulaanbaatar is considered to be one of the worlds largest coppergold deposits, containing approximately 40. Oyu tolgoi shareholders sign agreement to progress the. Concentrator and associated mine infrastructure airport, water pipeline. On 28 september, gobi oyu development support fund the gobi oyu dsf, was established as an independent. The event was held in the presence of prime minister saikhanbileg, minister for mining r. The oyu tolgoi mine is located in the south gobi region of mongolia. There is restricted access for teams from rio tinto, oyu tolgoi and our construction partners to oversee development and provide specialist technical services. Turquoise hill resources suite 3680 1 place villemarie montreal, quebec. The government of mongolia does not support the oyu tolgoi phase two project finance effort initiated by rio tinto. Turquoise hill remains committed to obtaining project finance to fund the development of the oyu tolgoi project and is engaging with the government of mongolia to achieve this.
This report sets out our analysis of huge oyu tolgoi mining project in mongolia, based entirely on public sources, and mainly on a 2014 technical report published by turquoise hill resources. The project involves the development of one of the worlds largest copper deposits. Prime minister of mongolia mp chimediin saikhanbileg said mongolia is back to business. This follows canadian stock exchange rules and shows positive project economics from. Coinvests with ifc in equityrelated investments in the infrastructure sector in emerging. Since 2010, rio tinto has also been the manager of the oyu tolgoi project. Provides an introduction to the fields of project finance and infrastructure finance, and gives a statistical overview of project financed investments over the years from 2009 to 20. The rio tinto managed oyo tolgoi copper and gold mine located in the water scarce south province has recognised the importance of optimizing. Oyu tolgoi announces approval of underground project. The facility is being provided by a syndicate of international financial institutions and export credit agencies representing the governments of canada, the united states. Oyu tolgoi underground mine development and financing. Summary of action mongolias mining sector is a significant contributor to the economy as well as a key water user. Development and financing plans for mining the ot reserve case ore is the. More than 80% of oyu tolgoi s total value lies deep underground.
Delay of the project finance of oyu tolgoi and its. The jewel in the crown of mongolias discovered deposits is the oyu tolgoi project in southern mongolia, which is often credited as being the largest undeveloped coppergold project in the world. Rio tinto is working with the government of mongolia to ensure oyu tolgoi is operating in accordance with the restrictions the mongolian authorities have put in place to contain the spread of. The oyu tolgoi copper mine in mongolia is a worldclass open pit mine and underground project. This allows foreign investors interested in mining investment to provide that capital for significant returns. Plans, issues and risks an overview of oyu tolgoi phase 2 mining plans and some of the issues and risks associated with block cave underground mining, international metal price uncertainty, project power supply, and impacts on water resources used by herders. Jec announced today it signed a contract with oyu tolgoi llc to provide engineering, procurement and construction management epcm services for the next stage in the development of the oyu tolgoi copper and gold mine in mongolia, the oyu tolgoi underground project.
In february 2020, turquoise hill resources, an international mining company, who owns 66 percent of the oyu tolgoi mine in mongolia, has submitted a ttpp feasibility study, based on a 300 mw coal fired power plant to be located approximately 150 kilometers from the oyu tolgoi mine in tsogttsetsii soum of umnugobi aimag, with a total project. Mining taxes centre for research on multinational corporations. The oyu tolgoi ot project, located approximately 550 kilometers south of mongolias capital city of ulaanbaatar is considered to be one of the worlds largest coppergold deposits, containing approximately 40 billion pounds of. Further underground development is subject to resolution of shareholder issues, approval of the feasibility study by oyu tolgoi s shareholders and the mongolian minerals council, agreement of a comprehensive funding plan including project finance, and receipt of all necessary permits. Turquoise hill provides update on oyu tolgoi project.
If this project is successfully developed, the gdp of mongolia could double in a relatively short period of time. Mongolia will vote in august to rip up parts of an investment agreement with rio tinto for the oyu tolgoi copper mine, which may force the miner to make concessions in a project. Work on the underground project continues, however there is restricted access for teams from oyu tolgoi, rio tinto and our construction partners to oversee development and provide specialist technical services. Rio tinto owns a 51% share of turquoise hill resources and manages the project. Mongolia signed an investment agreement for the oyu tolgoi project that. Complaint regarding the oyu tolgoi project cao ombudsman. The staterun ttpp, which will supply electricity to the oyu tolgoi mine, will be established at. Ivanhoe mines ltd idop technical report march 2012 811014. Oyu tolgoi passes sovereign risk test with flying colors. The project is being developed by rio tinto, an international mining company. The oyu tolgoi copper and gold project oyu tolgoi is being.
Oyu tolgoi llc multilateral investment guarantee agency. Further underground development is subject to resolution of shareholder issues, approval of the feasibility study by oyu tolgoi s shareholders and. Apr 05, 2019 the flagship oyu tolgoi project helped spur a mining boom that drove economic growth up to double digits from 201120, but a rapid collapse in foreign investment and falling commodity prices saw. Otllc to secure and draw down on the supplemental debt under the oyu tolgoi project finance facility and the availability of additional financing on terms reasonably acceptable to oyu tolgoi stakeholders to further develop oyu tolgoi. May 18, 2015 oyu tolgoi shareholders sign agreement to progress the development of underground mine. It is also one of the most modern, safe and sustainable operations in the world q4 2019 figures. The oyu tolgoi mine is located in the south gobi region of mongolia, approximately 550. Ot watch was established by a group of csos which have actively. Partner in world class oyu tolgoi underground coppergold mine. Oyu tolgoi has secured project finance for the underground mine development with funding by. Oyu tolgoi signs project finance agreement 15 december 2015. The survey will test oyu tolgois copper and gold mineralised trend. Oyu tolgoi signs project finance agreement 15 december.
Oyu tolgoi project financing export finance australia. Mongolia refuses to support rio tinto financing effort for oyu tolgoi by. Second complaint oyu tolgoi02 regarding the oyu tolgoi. Mining projects in mongolia need capital to finish securing minerals from the ground, and the financial institutions are not in place inside mongolia to provide large amounts of cash. Work on the underground project continues, however, progress is being slowed as a result of these measures.
The transaction was awarded project finance s african mining deal of the year and mining journals most effective financing of a mine or expansion project. Oyu tolgoi funding puzzle shows rio tinto between a rock and a hard place. Export finance australia is contributing to the financing of the expansion of the oyu tolgoi gold and copper mine, which will create a number of opportunities in the project s supply chain, many of which are expected to be awarded to australian smes. Pursuant to the ia and the arsha, ot llc is developing and operating the oyu tolgoi. The oyu tolgoi underground feasibility study includes analysis of two production cases, the 2014 reserve case and the 2014 life of mine lom case. Rio tinto continues to progress options to secure domestically sourced power for the oyu tolgoi copper mine. Ifcs presentation to the board of the wb for financing. Executive summary an overview of oyu tolgoi phase 2 mining plans and some of the issues and risks associated with block cave underground mining, international metal price uncertainty, project power supply, and impacts on water resources used by herders. Government of mongolia to finance tavan tolgoi power plant project. Oyu tolgoi finalizes underground feasibility study toronto. Audit committee means the audit, finance and procurement committee of the oyu tolgoi.
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