Oyu Tolgoi Signs Power Cooperation Agreement
Turquoise Hill Resources reported in midAugust the signing of an agreement
between the government of Mongolia and
Oyu Tolgoi LLC, the operating company for
the Oyu Tolgoi mine, for cooperation in
development of a comprehensive energy
plan for the South Gobi region of Mongolia.
Oyu Tolgoi LLC is owned 66% by Turquoise
Hill and 34% by the government. The
agreement provides a framework for a broad
range of power-related issues, including
establishment of a power generation source,
transmission lines and power imports.
The centerpiece of the agreement is an
open, international tender process to identify and select an independent power
provider to privately fund, construct, own,
and operate a power plant to supply electricity, with Oyu Tolgoi as its primary consumer. Full evaluation of the independent
power producer option is expected to take
place in nine to 12 months.
Participation in the agreement meets
Oyu Tolgoi’s obligation in its investment
agreement to establish a long-term power
supply within Mongolia four years from the
commencement of commercial production.
Oyu Tolgoi came into production in early
2013 and has been building production
since that time. The project currently
imports its power from China.
During the second quarter of 2014, Oyu
Tolgoi produced 140,000 mt of copper-gold
concentrate containing 36,200 metric tons
(mt) of copper and 113,000 oz of gold. Fullyear 2014 production is forecast at 135,000
to 160,000 mt of copper and 600,000 to
700,000 oz of gold in concentrates. Sales
contracts have been signed for 100% of Oyu
Tolgoi’s expected 2014 concentrate production and 92% of planned 2015 production;
84% of the mine’s concentrate production
has been contracted for up to eight years.
Oyu Tolgoi is currently engaged in discussions with the government regarding a $127
million claim against the company for unpaid
taxes, penalties, and fines (E&MJ, July 2014,
p. 6). Oyu Tolgoi is disputing the claim.
As featured in Womp 2014 Vol 09 - www.womp-int.com