Rio Tinto has recommended a new underground mine design for the Oyu Tolgoi copper-gold operation in Mongolia, bumping up its development capital by $1.3–$1.8 billion.
This concerns Panel 0 of the Hugo Dummett North underground mine at Oyu Tolgoi, with the updated feasibility study (FS) validating the caving method of mining.
The design will cause a delay of 21 to 29 months for Oyu Tolgoi’s first sustainable production compared with the original FS guidance in 2016.
Rio Tinto originally flagged a $5.3 billion development capital for Oyu Tolgoi.
When the underground mine is complete, Oyu Tolgoi will be the world’s third largest copper mine.
According to Rio Tinto chief executive of copper and diamonds, Arnaud Soirat, the amended design is a positive step in the development of the underground mine as it will unlock the most valuable part of Oyu Tolgoi.
“We remain focussed on delivering the underground project safely and within the guidance ranges we have announced on both cost and schedule,” Soirat said.
Rio Tinto flagged some stability risks associated with the original mine design last year.
The updated design retains two in-situ rock pillars on either side of Panel 0 for geotechnical stability instead of within the mining area.
Rio Tinto will also shift the material contained in the pillars from ore reserves to mineral resources, to be recoverable at a later stage.
Optimisation of mine designs for Panels 1 and 2 is ongoing, which may result in further movements in reclassifications of ore reserves and mineral resources.
Mining zone is sub-blocked into Panel 0, Panel 1 and Panel 2 to reduce risk and increase productivity.
The Hugo Dummett deposit is a typical copper-gold porphyry system with associated high sulphidisation mineralisation.
Rio Tinto owns 33.5 per cent of Hugo Dummett North and 29.5 per cent of Hugo Dummett North extension.
Once in production, ore will be processed through the existing crushing, milling and flotation circuit to produce a copper concentrate with gold and silver as byproduct.
Oyu Tolgoi is jointly owned by Rio Tinto and the government of Mongolia