Turquoise Hill has stated that the company along with Rio Tinto has been engaged to finalize project financing plan and term sheet. The lenders have agreed for a debt ceiling above the expected $4bn in funding, which will allow future finance flexibility.
The new developments follow approval for debt from the European Bank of Reconstruction and Development and the World Bank Group’s International Finance Corporation in February 2013.
Earlier in April, Rio Tinto had also signed commitment letters with 15 global banks that locked in pricing and terms for financing.
The boards of Export Development Canada, Australia’s Export Finance and Insurance Corporation, and Export-Import Bank of the United States also conditionally approved the financing for Oyu Tolgoi project.
Further, the companies are expected to ink the binding documents by the end of June 2013.
Meanwhile, the developers have secured long-term sales contracts for nearly 75% output from the Oyu Tolgoi mine in the first three years, while half of the total concentrate production was contracted for ten years. The contracts, however, are subject to approval.
Oyu Tolgoi is estimated to produce about 450 000 tons of copper and 330 000 ounces of gold a year at its full production.
