Rio Tinto, Turquoise Hill and the Government of Mongolia have reached an agreement on the preferred domestic power solution for Oyu Tolgoi that paves the way for the Government to fund and construct a State-Owned Power Plant at Tavan Tolgoi, Mongolia.
The agreement, which is a revision of the Power Source Framework Agreement (PSFA) signed in 2018, states that the parties will work towards finalising a Power Purchase Agreement by the end of March 2021.
In addition, the amended PSFA sets a proposed timetable for development, with the construction of the coal-fired power plant set to begin no later than 1 July 2021, and commissioning within four years thereafter.
Oyu Tolgoi is one of the largest known copper and gold deposits in the world. It is located in the South Gobi region of Mongolia, approximately 550 kilometres south of the capital, Ulaanbaatar, and 80 kilometres north of the Mongolia-China border.
Open pit mining commence at Oyu Tolgoi in 2011 and the copper concentrator, the largest industrial unit ever built in Mongolia, began processing mine ore into copper concentrate in 2013.
The copper concentrator contains enough steel to construct the Eiffel Tower three times and took more than 15.7 million individual work hours to build.
Rio Tinto outlines that current infrastructure at Oyu Tolgoi will allow the mine to operate for decades to come.
Oyu Tolgoi currently uses imported power and both the Government of Mongolia and Oyu Tolgoi have committed to extending the current arrangement to ensure continued stable power is supplied to the mine and underground project until the State-Owned Power Plant is commissioned and can supply stable, reliable and continuous power.
Rio Tinto’s Copper and Diamonds chief executive, Arnaud Soirat, said the agreement provides a potential pathway to securing a domestic power supply for the Oyu Tolgoi mine and underground project for the benefit of all shareholders and the wider community.
“We look forward to working with the Government of Mongolia to progress the solution.”
Oyu Tolgoi is jointly owned by the government of Mongolia, which has 34 per cent ownership, and Turquoise Hill Resources, which owns 66 per cent. Rio Tinto owns 50.8 per cent of Turquoise Hill Resources and manages the operation on behalf of the owners.