$5Billion Mongolian Copper-Gold Project Set To Go Ahead
Ivanhoe Mines and its partner, Rio Tinto, have finalised procedural and administrative conditions in their investment agreement with the Mongolian government to develop the Oyu Tolgoi copper-gold project. Full-scale construction is set to begin in the second quarter of 2010, the company said on Wednesday.
The Mongolian government will become a junior partner in the $5 billion project with a state-owned resource company owning a 34 per cent stake in the Ivanhoe Mines subsidiary, Oyu Tolgoi LLC. Ivanhoe owns the remaining 66 per cent while Rio Tinto has a 22 per cent stake in Ivanhoe and will provide financial and technical support for the project. Rio Tinto has an option to increase its stake in Ivanhoe to 46.6 per cent over the next 19 months.
The partnership have approved an initial $758 million to launch full-scale construction of the complex
Production of copper and gold is expected to begin in 2013 with a five year ramp up to full production of 450,000 tones of copper per year with significant gold by-products.
Included as part of the project’s infrastructure is a 105 km highway linking the Oyu Tolgoi complex with the Mongolia-China border as well as a regional airport capable of handling Boeing 737-sized aircraft.
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