[SLIDESHOW] Rio Tinto agrees to invest in Mongolia's Oyu Tolgoi mine
The mine is located 50 miles north of China and is expected to take between five to seven years to commence production once all finances and approvals are secured. Previously, Mining Global reported that Rio Tinto helped get the Oyu Tolgoi project back on track after resolving a tax dispute with the Mongolian government.
RELATED TOPIC: Oyu Tolgoi copper-gold mining complex, Mongolia
The US$5.4 billion mine is expected to increase Mongolia’s economy by over 30 percent, and hopes to begin its second phase of construction later this year. Rio Tinto’s Turquoise Hill Resources is the majority owner of Oyu Tolgoi LLC, which will lead construction of an underground mine at the site of the existing open-pit operation.
The mine is expected to produce an average of 430,000 tonnes of copper and 425,000 ounces of gold each year, but still needs another $4 billion in financing. There are currently 14 international banks and organisations are involved in the financing of the next phase of the project, including the World Bank’s International Finance Consortium.
Turquoise Hill has stated that it’s already in talks with several commercial banks, export-credit agencies and global financial institutions to secure the rest of the funding. The company anticipates about 80 per cent of the project is tied to its underground operations.
The mine initially had trucks transporting copper to China in 2013, however, the project’s expansion has since been delayed as Mongolia demanded a higher percentage of revenue from the profit.
Oyu Tolgoi is important to Rio’s plan to tap new minerals in developing countries in an attempt to help reduce dependence on plummeting iron ore.
In a statement, Rio Tinto said expansion work can now begin after coming to terms with the latest agreement. “With a new pathway to development of the underground mine agreed, the focus now shifts to completing the project finance, the feasibility study and securing all necessary permits to that the underground mine development can proceed.”
British Lithium Pressured Due To Calls for Electric Cars
The British demand for lithium is set to reach 75,000 tonnes by 2035 as the government works towards their ban on the sale of high-polluting diesel and petrol vehicles within the UK. This comes as automakers worldwide continue to insist on the benefits electric vehicles will have on slowing the rate of climate change.
It is estimated that the UK will require 50,000-60,000 MT of lithium carbonate a year by 2035 for battery production to satisfy government needs. This is assuming production remains at 1.2 million vehicles per year, and the amount of lithium required does not increase.
British Lithium, which hopes to begin constructing a quarry to produce 20,000 MT of lithium carbonate a year in a $400 million investment, are not without competitors, both within the UK and abroad.
Competition For Lithium Rises In Europe
After only five years after its initial launch, Cornish Lithium is setting its sights on becoming a UK powerhouse in mining lithium, aiming to begin commercial production in under four years. Jeremy Wrathall, a former investment banker and current managing director of Cornish Lithium, had the future in mind when founding the company.
“In 2016, I started to think about the electric vehicle revolution and what that would mean for metal demand, and I started to think about lithium,” he said in an interview with AFP. “A friend of mine mentioned lithium being identified in Cornwall, and I just wondered if that was a sort of unrecognised thing in the UK.”
Lithium was first discovered in Cornwall around 1864 and has not been mined again since 1914 when it was produced as an ingredient in fireworks. Now, however, Cornish Lithium is reportedly in the testing stage to see if the metal can be produced commercially to meet the growing demand required for the electric car sector.
Despite Cornwall’s close historic ties to mining lithium, Wrathall insists that the project is purely commercial.
Cornish Mining Revival For Lithium Production
“It’s not a mission that drives me to the point of being emotional or romantic,” he says. “It’s vitally important that we do get this technology otherwise Europe has got no lithium supply.”
The European Commission has also stated their goal to end the sale of new petrol and diesel cars by 2035 to aid the environment. That being said, the majority of lithium extraction currently relies on power provided by environmentally damaging fossil fuels─a slight contradiction.
Alex Keynes, from the Brussels-based lobby group Transport & Environment, is adamant that mining for lithium should be done sustainably.
“Our view is that medium-to-long term, the majority of materials including lithium should come from efficient and clean recycling.
“Europe from a strategic point of view should be looking at securing its own supply of lithium.”
Despite growing competition from abroad, British Lithium Chairman, Roderick Smith, continues to place importance on the mining of lithium within the UK.
“Imagine what the UK economy would look like if we lost our automotive industry,” Smith says. “The stakes are high for the UK.”
Smith expects the UK to compete with other European countries to secure a lithium battery plant in the near future.