Oyu Tolgoi LLC welcomes agreement to advance the development of the underground mine in Mongolia

Ulaanbaatar, Mongolia – Oyu Tolgoi welcomes the agreement by its shareholders – the Government of Mongolia, Turquoise Hill Resources, and Rio Tinto – to move ahead with developing the underground mine at Oyu Tolgoi.

The shareholders today signed an Underground Development Plan which addresses the key outstanding shareholder issues and sets out an agreed basis for the funding of the project.

With a new pathway to development of the underground agreed, the focus now shifts to finalising the project finance, revising and approving the feasibility study, and securing all necessary permits so that the underground development can proceed.

Batsukh Galsan, Chairman of Oyu Tolgoi’s Board of Directors, said: “This is an extremely positive development for Mongolia and all those involved with Oyu Tolgoi. I want to thank the negotiating teams, of both the Government of Mongolia and Rio Tinto, for the patience, respect, and professionalism shown with reaching this agreement. This is a proud moment for the Oyu Tolgoi project, its shareholders, and the country. On behalf of the Board of Oyu Tolgoi LLC, I welcome today’s news.”

Andrew Woodley, President & Chief Executive of Oyu Tolgoi LLC, said: “I am very pleased our shareholders have resolved the outstanding issues to progress with the development of the underground mine at Oyu Tolgoi. With this agreement, further progress can now be made to unlock the large, high-grade ore body that lies well below the surface of our operation and is one of the best copper-gold ore bodies anywhere in the world.

“Since taking up the position of President & Chief Executive late last year, I have been struck by the professionalism and dedication of our hard-working Mongolian employees. I know that they will be very pleased with this news.

“Of course, the open-pit phase of the mine continues to operate both safely and efficiently, with safety remaining our number one focus area. We continue to work hard on increasing productivity and reducing the cost base of our operation in order to ensure the long-term economic viability of the business.”

There have been significant developments this year for Oyu Tolgoi LLC which have set a solid foundation for progressing the underground development. In the first quarter, the business celebrated the one millionth tonne of concentrate shipped and signed a MoU with Erdenet in order to share best practice on health and safety.  In April, a Cooperation Agreement with Umnugovi (the province where the Oyu Tolgoi mine is based in the South Gobi) was signed to ensure sustainable development on water, environment, pastureland management, cultural heritage, and local business development.

Notes to the editor:

  • Work was paused on Phase II on August 12, 2013.
  • It is estimated that 80 per cent of the value of Oyu Tolgoi lies in the underground part of the mine.
  • Oyu Tolgoi has paid US$78.5 million (this includes a US$20 million pre-payment) in taxes, fees, and royalties to the Government of Mongolia year-to-date in 2015.