OyuTolgoi looms as one of Rio Tinto’s most exciting growth projects on the back of the company’s recent takeover of the project’s majority owner Ivanhoe Mines, but difficulties in delivering power to the mine’s remote location are continuing to fester, with Ivanhoe confirming that a deal to import power from China had still not been reached.
The current plan would see the mine site, which includes concentrators and a large workers village, connected to the power grid on the Chinese side of the border for the first four years of the mine’s life. But such a deal requires an agreement between Chinese and Mongolian authorities, and Ivanhoe has confirmed that officials from the two nations are still to agree on terms. The company says it remains hopeful that talks will be “expedited” to ensure the imported power was available for meet the target of first production in the third quarter of 2012.
Ivanhoe said extra diesel-generated power was being bought into the mine site in the meantime, and warned that production schedules could slip if the plan to import Chinese power had to be abandoned in favour of building a coal-fired power station on site at OyuTolgoi sooner than planned. Under the mine contract, all power must be sourced from within Mongolia after four years of mine life.
“If the establishment of a dedicated power plant is required for the early production at OyuTolgoi, the required revisions to the construction schedule for the OyuTolgoi project could adversely affect the project’s ability to achieve the planned start of commercial production in 2013,” Ivanhoe has said in a statement.
OyuTolgoi looms as one of Rio Tinto’s most exciting growth projects on the back of the company’s recent takeover of the project’s majority owner Ivanhoe Mines, but difficulties in delivering power to the mine’s remote location are continuing to fester, with Ivanhoe confirming that a deal to import power from China had still not been reached.