Rio Tinto begins underground work at a vast copper mine in Mongolia (official media)
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Ulaanbaatar (AFP) – Underground operations have finally started at a copper mine in Mongolia, state media reported, ending years of delay for British-Australian giant Rio Tinto.
The massive Oyu Tolgoi gold and copper mine has been mired in controversy for years and unsettled by protests from locals worried about environmental damage and foreign influence.
While it started production from an open pit several years after Mongolian authorities signed a deal in 2009, Rio Tinto secured a multi-billion deal in 2015 paving the way for a second phase underground more valuable.
About 80% of the mine’s reserves are believed to be underground.
“The start of underground mining operations at Oyu Tolgoi demonstrates to the world that Mongolia can work with investors in a sustainable way and become a trusted partner,” Mongolian Prime Minister Luvsannamsrai Oyun-Erdene said Tuesday at a ceremony marking the start of operations. to the official Montsame news agency.
The report adds that the two sides reached agreement on contentious issues following constructive discussions.
Oyun-Erdene said it expected the underground mine to be fully operational within the agreed period or the first quarter of next year, without incurring additional debt for Mongolia.
The megaproject is expected to contribute up to a third of Mongolia’s gross domestic product when fully operational.
Rio Tinto and its subsidiary Turquoise Hill Resources are to be responsible for additional funding until the first half of 2023, when sustainable underground production is achieved, Montsame said.
Oyu Tolgoi is 66% owned by Turquoise Hill Resources and 34% by the Mongolian government.
Turquoise Hill said in a press release that it “plans to begin caving operations in the coming days.”
Shares of Turquoise Hill Resources rose about 16% in New York overnight on the news, and after it announced it had reached an agreement to forgive $2.4 billion in debt for Mongolia.
© 2022 AFP