Mongolian Government 'Made Mistakes' in Delaying Rio Tinto Copper Exploration
Good news for Rio Tinto – its stalemate with the Mongolian government over its Oyu Tolgoi copper mine site appears to be coming to an end. The Mongolian government has admitted that it made some mistakes in putting the Rio Tinto project on hold and, with that, all complications should be fully resolved by September.
According to Reuters, Mongolian vice minister for economic development Chuluunbat Ochirbat discussed the issue this week and noted that the Mongolian government realizes that it made mistakes in delaying Rio Tinto’s copper exploration at Oyu Tolgoi and is working on moving past this issue:
"We are under arrangements and negotiations with Rio Tinto now to complete the process by September this year," he said on the sidelines of a conference in London. "Underground mining will be put into operation in a year and a half or two years time," he added.
Mongolia’s decision to delay underground mining work may have hurt Rio Tinto’s production timetable, but one thing that officials have ruefully noted is that the delay has likely hurt Mongolia more – Reuters notes that the Oyu Tolgoi mine holds the potential to contribute 20-30 percent of Mongolia’s economy and, what’s more, the government’s delays may have hurt Mongolia’s potential to attract business in the future:
"The ongoing negotiation process with Rio Tinto has really hurt the reputation of Mongolia as a reliable partner for businesses and investors," [Ochirbat] said.
[…] "We have made the conclusion that we have made some mistakes in the legislation, we tightened regulations in the mining industry too much and that was the reason why we showed weaker performances (last year)," Ochirbat said, referring to a slowdown in GDP growth for the country in 2013.
According to Ochirbat, Mongolia is taking full responsibility for the standoff and hoping that the issues it caused can be reversed. If Rio Tinto is able to get its underground mining operation constructed and running within the projected two years with beneficial results, then that may well be the case.
Vale invests $150mn to extend life of Manitoba operations
Vale has announced a $150mn CAD investment to extend current mining activities in Thompson, Manitoba by 10 years while aggressive exploration drilling of known orebodies holds the promise of mining well past 2040.
Global energy transition is boosting the market for nickel
The Thompson Mine Expansion is a two-phase project. The announcement represents Phase 1 and includes critical infrastructure such as new ventilation raises and fans, increased backfill capacity and additional power distribution. The changes are forecast to improve current production by 30%.
“This is the largest single investment we have made in our Thompson operations in the past two decades,” said Mark Travers, Executive Vice-President for Base Metals with Vale. “It is significant news for our employees, for the Thompson community and for the Province of Manitoba.
“The global movement to electric vehicles, renewable energies and carbon reduction has shone a welcome spotlight on nickel – positioning the metal we mine as a key contributor to a greener future and boosting world demand. We are proud that Thompson can be part of that future and part of the low carbon solution.”
Vale continues drilling program at Manitoba
Coupled with today’s announcement, Vale is continuing an extensive drilling program to further define known orebodies and search for new mineralization.
“This $150mn investment is just one part of our ambitious Thompson turnaround story. It is an indicator of our confidence in a long future for the Thompson operations,” added Dino Otranto, Chief Operating Officer for Vale’s North Atlantic Base Metals operations.
“Active collaboration between our design team, technical services, USW Local 6166, and our entire Thompson workforce has delivered a safe, efficient and fit-for-purpose plan that will enable us to extract the Thompson nickel resources for many years to come.”
The Thompson orebody was first discovered in 1956 by Vale (then known as Inco) following the adoption of new exploration technology and the largest exploration program to-date in the company’s history. Mining of the Thompson orebody began in 1961.
“We see the lighting of a path forward to a sustainable and prosperous future for Vale Base Metals in Manitoba,” said Gary Annett, General Manager of Vale’s Manitoba Operations.