Rio Tinto has reached an agreement with its Oyu Tolgoi partners that will see the Government of Mongolia fund and construct a state-owned power plant for the copper-gold project.
This is a revision of the original power source framework agreement (PSFA) signed in 2018, which stated that the Mongolian Government would work towards finalising a power purchase agreement by the end of March 2021.
The amended PFSA also sets a proposed development timeline, with construction of the coal-fired power plant to begin no later than July 1 2021 and commissioning within four years after this date.
Currently, Oyu Tolgoi uses imported power, an arrangement the Government of Mongolia and Rio Tinto have committed to extend to ensure continued stable power is supplied to the project until the power plant is built.
Once completed, this will provide stable, reliable and continuous power for the project, which will be the world’s third largest copper mine when the underground operations are developed.
“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,” Rio Tinto copper and diamonds chief executive Arnaud Soirat said.
“We look forward to working with the Government of Mongolia to progress the solution.”
At full production, Oyu Tolgoi will produce 95,000 tonnes of ore on a daily basis, tripling its current annual copper concentrate production rate.