Rio Tinto reaches agreement on domestic power supply with Mongolia for OT
2 өдөр, 14 цаг өмнө
- Rio Tinto will amend its current power supply agreement with the Mongolian government by March 2021
- TRQ’s share price has been heavily volatile amid the successes and struggles at OT, last year rising significantly on positive developments
Rio Tinto Ltd had reached an agreement with Mongolia to domestically supply power to its Oyu Tolgoi copper-gold mine through a state-owned coal-fired power plant at Tavan Tolgoi, the company reported on Monday. The Government of Mongolia owns 34 percent in the Oyu Tolgoi project, while Rio Tinto’s majority-owned Turquoise Hill Resources (TRQ) has a 66 percent stake in the project. The mining giant said in a state ment it will amend its current power supply agreement with the Mongolian government by March 2021, under which the government will begin construction of the coal-fired power plant by July 2021. The plant, being built to supply power to the Oyu Tolgoi project, is expected to be commissioned within the next four years. Until the commissioning of the state-owned plant, power supply to the mine and the underground project will continue under the current terms. In March, Rio had flagged slowing down operations at the Mongolian mine due to coronavirus restrictions. Mongolia and Oyu Tolgoi LLC reached an agreement on the State-owned power plant, Turquoise Hill Resources and Rio Tinto announced Sunday, affirming the April decision by the Mongolian cabinet over the power supply for the mine. Mongolia will fund and construct the power plant at Tavan Tolgoi, while the existing power source agreement was amended. The power plant will deliver “reliable” power for open-pit operations and project development Turquoise Hill Resources said. TRQ’s share price has been heavily volatile around the successes and struggles at Oyu Tolgoi, last year rising significantly on positive developments while plummeting by nearly half just months later. OT 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 is able to supply stable, reliable and continuous power. Arnaud Soirat, Copper and Diamonds chief executive of Rio Tinto Ltd, said, “This 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.