Upon its delivery, SOPP would provide long-term and reliable power supply for Oyu Tolgoi's open pit operations and underground project development


Copper concentrator, Oyu Tolgoi mine, Mongolia (Credit: Rio Tinto.)

Turquoise Hill Resources announced the Government of Mongolia and Oyu Tolgoi LLC have reached an agreement to prioritise a State Owned Power Plant (SOPP) in order to support the Government’s decision, taken by Cabinet in April, 2020, as the domestic power solution for the Oyu Tolgoi mine in Mongolia. The agreement envisages that the Government of Mongolia would fund and construct a SOPP at Tavan Tolgoi.

The existing Power Source Framework Agreement (PSFA) between Oyu Tolgoi and the Government of Mongolia has been amended to reflect joint prioritisation and progression of SOPP in accordance with agreed milestones. Upon its delivery, SOPP would provide long-term and reliable power supply for Oyu Tolgoi’s open pit operations and underground project development.

The Parties will now work towards achieving the milestones agreed in the amendment, which include signing a Power Purchase Agreement by 31 March, 2021, commencement of construction by no later than 1 July 2021 and commissioning of SOPP within four years thereafter, and, negotiating an extension to the existing power import agreement by 1 March, 2021, to ensure that there is no disruption to the power supply required to safeguard Oyu Tolgoi’s ongoing operations and development.

“We welcome the Government of Mongolia’s proposal to progress Oyu Tolgoi’s long-term domestic power requirements and to prioritise SOPP,” stated Ulf Quellmann, Chief Executive Officer of Turquoise Hill. “The amendments to the PSFA provide Oyu Tolgoi and the Government the additional framework and time required to solidify a power solution and finalise the commercial arrangements in the best interests of all stakeholders. This agreement is a testament to the continued collaboration and commitment of the Government, Turquoise Hill and Rio Tinto to the long-term success of Oyu Tolgoi.”

Source: Company Press Release