The Oyu Tolgoi project located in the South Gobi desert of Mongolia ranks among the world’s largest copper-gold mines.
Oyu Tolgoi LLC is the project developer, in which Turquoise Hill Resources holds 66% stake. Erdenes Oyu Tolgoi, a wholly-owned enterprise of the Government of Mongolia, holds the remaining 34% stake.
Rio Tinto, which owns 51% shares of the Turquoise Hill Resources, is currently operating the project, which is estimated to cost between £5bn ($6.5bn) and £5.8bn ($7.5bn) and have a mine life of more than 50 years.
Oyu Tolgoi produced 146,346 tonnes (t) of copper and 241,840 ounces (Oz) of gold milling a total of approximately 40.8 million tonnes of ore in 2019.
However, copper concentrate shipments from the mine during the first quarter of 2020 have slowed down due to the coronavirus outbreak in China.
Oyo Tolgoi project development phases
Oyo Tolgoi is being developed in two phases, with the first phase involving Oyut open-pit mine, a concentrator, and supporting infrastructure. The first concentrate from the open-pit operations was produced in December 2012, with the first shipment made in July 2013.
As of July 2018, the open-pit mine was estimated to have exported approximately four million tonnes (Mt) of concentrate to China.
Development agreement for the Oyu Tolgoi underground (Phase 2) was signed in May 2015, followed by the project’s financial closure in December 2015. It comprises the Hugo Dummett deposit consisting of the Hugo North and Hugo South, and the Heruga deposits.
The phase 2 construction began in May 2016, with first production from the underground mine anticipated by the end of 2021.
Construction of two of the total five shafts planned for the underground mine was completed as of October 2019. The two completed shafts include the primary production shaft (Shaft 2), while the construction of Shafts 3 and 4 is currently underway.
More than 500,000 tonnes (t) of copper per annum is expected to be produced, upon full ramp-up of the underground mine by 2027. Gold production will take place as by-products graded at 0.35 grams per tonne (g/t) on an average.
Financing for the Oyo Tolgoi underground project
Turquoise Hill secured a £3.4bn ($4.4bn) finance facility for the Oyo Tolgoi underground development from a group of lenders, in December 2015.
The lenders group includes 15 commercial banks and international financial institutions, and export credit agencies representing the governments of Canada, the US, and Australia. The lenders also agreed to provide a supplementary debt of $1.6bn for the project.
Rio Tinto location, geology, and mineralisation
Located within 8,496ha wide mining license, the Oyu Tolgoi project is situated approximately 550km from Ulaanbaatar, the capital city of Mongolia.
Geology comprises of lower to mid-Paleozoic metasediments and island arc basalts resting upon a lower Palaeozoic ophiolite complex. Felsic to mafic igneous rocks are abundant in the area with few outcrops and two major drainages flowing through the property.
The deposits extend for over a 26km strike length in the form of copper-gold porphyry and related high-sulphidation copper-gold style deposit. Mineralisation is identified in contorted milky white quartz veins formed in the basalt formation as well as on small quartz monzodiorite dykes.
Oyu Tolgoi LLC holds the Hugo North Extension copper-gold deposit and majority of the Heruga copper-gold-molybdenum deposit in a joint venture wuth Entrée. Oyu Tolgoi holds 80% stake in the Entrée/Oyu Tolgoi JV property, while the remaining 20% is held by Entrée.
Oyo Tolgoi ore reserves
The total proven and probable mineral reserves at Oyo Tolgoi are estimated to be 1,450 million tonnes (Mt) of ore, graded at 0.86% copper, 0.3 grams per tonne (g/t) of gold, and 1.97g/t of silver.
The project is expected to contain 24,037 million lbs (Mlbs) of copper, 10.59 million ounces (Moz) of gold, and 74.88Moz of silver.
Mining and ore processing
The Oyut open pit is mined using conventional shovel-truck operation involving drilling, loading, and haulage of mined ore. A combination of 34m3 diesel hydraulic shovels and 56m3 electric rope shovels will be used along with 290t haul trucks.
Underground panel/block caving method will be used to mine the Hugo North, Hugo South, and Heruga deposits. Initial mining will begin at Hugo North, which contains highest-grade copper and gold in its first three panels.
Mined material will be transported to surface via road trains and conveyed to the run of mine (ROM) stockpile nearby the concentrator facility.
Ore is currently processed at the conventional semi-autogenous grinding (SAG) mill / ball mill / grinding circuit (SABC). It will be slurried, grinded in SAG, and forwarded to the ball mills operating in closed circuit with cyclones.
The cyclone overflow is conveyed to the flotation circuit, followed by cleaning to obtain a final grade concentrate. The cleaned concentrate is thickened, filtered, packed in 2t bags, and transported to the market.
Infrastructure facilities for Oyu Tolgoi underground
The project can be accessed from major unpaved roads connecting Ulaanbaatar as well as from nearby town across the Chinese border. It is also located close to the proposed South Gobi Rail alignment, while air access is available from the Khanbumbat airport.
Inner Mongolia Power International Cooperation (IMPIC) is currently supplying the power needed for the project through Mongolian national power transmission grid. A 300MW power plant is also proposed to be built near the Tavan Tolgoi coalfields to supply electricity to the mine.
Raw water and process water required by the project will be sourced through pipes from the Gunii Hooloi basin, located to the north of the Oyu Tolgoi site.
Workers are currently accommodated at two on-site camps, namely Oyut and Manlai.
Tailings will be stored at the existing tailings storage facility (TSF) located approximately 5km from the processing plant.
Major infrastructure available onsite includes internal access roads, power supply system, intake and exhaust ventilation system, warehouses, central heating facility, concentrate logistics facility, and waste handling and recycling facilities.
Tavan Tolgoi power plant
Oyu Tolgoi LLC submitted a feasibility study for the proposed Tavan Tolgoi power plant (TTPP) project to the Government of Mongolia in February 2020.
The 300MW coal-fired power plant is estimated to cost £712m ($924m). The proposed plant is expected to supply domestically sourced power to the Oyu Tologi mine by June 2023.
In July 2010, Flour received a contract valued $1bn for overall program management along with the engineering, procurement, construction, and management of some portions of the Oyu Tolgoi mining complex.
OreWin prepared the technical report for the Oyo Tolgoi project on behalf of Turquoise Hill Resources in 2016.
The Entrée/Oyu Tolgoi JV engaged Amec Foster Wheeler for preparing the NI 43-101 Technical Report for the Oyu Tolgoi project.