Rio Tinto has to find a domestic power source for Oyu Tolgoi within four years.
JOHANNESBURG (miningweekly.com) – Global miner Rio Tinto is considering its options for domestic power generation for the Oyu Tolgoi mine, including building an on-site power station, the company said on Friday, as it confirmed that the government of Mongolia had terminated a framework agreement for an energy plan for the South Gobi region.
The Southern Power Cooperation Agreement (SPCA) laid out a framework for cooperation between the government and Oyu Tolgoi to deliver an energy plan for the region. The primary intention as to develop a new independent power plant at the Tavan Tolgoi coalfields, with Oyu Tolgoi as the offtaker, rather than owner.
However, following the termination of the PSCA, Oyu Tolgoi now has to deliver a domestic power source for the operation within four years, Rio Tinto said.
The miner said that it would continue to review its capital expenditure (capex) forecast for the project, but noted that it had already earmarked $250-million a year for the development of a power station in Mongolia in its 2019 and 2020 capex forecasts.
“The cost and means of financing will be finalised between shareholders,” the company stated.
The Oyu Tolgoi copper/gold mine was discovered in Mongolia’s Gobi Desert in 2001 and Rio Tinto gained control in 2012. Oyu Tolgoi is jointly owned by the government of Mongolia, with 34%, and Turquoise Hill with 66%. Turquoise Hill is 51%-owned by Rio.