Oyu Tolgoi mine

Oyu Tolgoi
Number 1 Shaft at Oyu Tolgoi
Location
Oyu Tolgoi Location in Mongolia 43°00′30″N 106°50′35″E / 43.00833°N 106.84306°E / 43.00833; 106.84306Coordinates: 43°00′30″N 106°50′35″E / 43.00833°N 106.84306°E / 43.00833; 106.84306
Location	Oyu Tolgoi
Aimag	Ömnögovi
Country	Mongolia
Owner
Company	Ivanhoe Mines Mongolia Inc
Website	www.ivanhoemines.com

The Oyu Tolgoi mine (Mongolian: Оюу Толгой, also Oyuu Tolgoi, Turquoise Hill) is a combined open pit and underground mining project in Khanbogd sum within the south Gobi Desert, approximately 235 kilometres (146 mi) east of the Ömnögovi Province capital Dalanzadgad. The site was discovered in 2001 and is being developed as a joint venture between Ivanhoe Mines, Rio Tinto and the Government of Mongolia. The mine is under construction as of 2010 and scheduled to begin production in 2013.

The Oyu Tolgoi mining project is the largest financial undertaking in Mongolia's history and is expected upon completion to account for more than 30% of the country's gross domestic product. Copper production is expected to reach 450,000 tonnes (500,000 short tons) annually. Financing for the project has come in part from the Rio Tinto Group and an investment agreement between Ivanhoe Mines and the government of Mongolia.

History

Canadian-based Ivanhoe Mines discovered the gold-copper ore deposit in 2001 in the Gobi Desert of Mongolia. It is in an area known as Oyu Tolgoi (Mongolian for Turquoise Hill),^[1] where in the time of Genghis Khan outcropping rocks were smelted for copper.^[2] By 2003 there were 18 exploration drill rigs on the property employing approximately 200 people, and Oyu Tolgoi was the "biggest mining exploration project in the world."^[1]

Description

The Oyu Tolgoi mine is in the South Gobi Desert of Mongolia, 80 kilometres (50 mi) north of Mongolia's border with the People's Republic of China, where the mined copper is expected to be shipped.^[2] Oyu Tolgoi deposits contain (as of 2010) an estimated 79 billion pounds (35,833,000 tonnes) of copper, and 45 million ounces (1,275,000,000 grams) of gold.^[3] Production is scheduled to begin in 2013 and to reach full capacity in 2018. Over the anticipated lifespan of the mine (45 years), Oyu Tolgoi is scheduled to produce 450,000 tonnes (500,000 short tons) of copper per year, an amount equal to 3% of global production. Oyu Tolgoi is also expected to produce 330,000 ounces of gold annually.^[4][5]

Mining and milling

Oyu Tolgoi will use both underground and open pit mining techniques. Initially the mine will produce 70,000 tonnes per day, ramping up to 85,000 tonnes from both the open pit and the underground mine (underground mining is to be done by block caving). The yield from the first phase of mining will be ground through one semi-autogenous grinding mill (SAG mill). Expansion to new underground areas will result in an additional increase of up to 140,000 tonnes per day with a possible increase to 170,000 tonnes per day.^[6]

Financing

The original discovery site of the Oyu Tolgoi deposit

As of 2010, the estimated cost of bringing the Oyu Tolgoi mine into production was US$4.6 billion,^[7] making it (financially) the largest project in Mongolian history.^[8] The mine will account for more than 30% of Mongolia's GDP.^[6] In early 2010 global mining company Rio Tinto owned 22.4% of Oyu Tolgoi owner Ivanhoe Mines, and gave both technical assistance and financial support to the project. At the time Rio Tinto had the option of increasing their stake to 46.6%. On 31 March 2010 the Government of Mongolia approved an investment agreement where they would purchase 34% of the project.^[9] In October 2010, Ivanhoe announced a new US$1 billion share offering in order to raise funds to develop this mine.^[10] Rio Tinto increased its ownership of Ivanhoe in December 2010, also assuming direct management of the design and construction of the project, however without fulfilling another aim, to achieve direct ownership of the mine.^[11][12]

Environment

There has been some speculation of the effects of Oyu Tolgoi on the livelihood of traditional Mongolian herders in the South Gobi region. It is feared that mining will cause a shortage of water and an increase of dust which will lead to "desertification and the decreasing quality of vegetation"^[13] in the region. This claim may, however, be misleading because the Gobi, being one of the driest places on Earth, is already a desert. The water source for the mine is a previously untapped deep saline aquifer that does not produce potable water; water from it will be recycled/reused to minimise extraction rates.

Other sources point to a wider concern that pollution will affect the long term health of millions in the capital city [Ulaanbaatar]^[14] as the country grows at an increasing rate. However, as Oyu Tolgoi is some 500+ km (300+ miles) to the south of Ulaan Baatar, this causal link is improbable. Air and particulate pollution in the capital is far more likely to be caused by the combination of its topography - it is surrounded by high hills and mountains - and the practice of burning oil and high sulphur coal in local power stations and in the ger dwellings around the outskirts of the capital. The rapid expansion of Ulaan Baatar's population is clearly creating considerable strains on the hitherto very limited infrastructure and it is to be hoped that this is where the Mongolian government will be spending some of its not inconsiderable revenues from the mine.

References

External links

Wikimedia Commons has media related to: Oyu Tolgoi

• Oyuu Tolgoi web site
• Ivanhoe Mines Mongolia Inc web page
• Mongolian mining directory