Rio Tinto and Mongolia reach power supply deal
The copper-gold mine are going to be furnished with power through a state-owned coal-fired power station at Tavan Tolgoi. 34% of the Oyu Tolgoi project is owned by the Mongolian state. Rio's majority-owned Turquoise Hill Resources incorporates a 66% stake within the project.
Rio Tinto, the mining superpower, said during a statement it'll amend its current power supply agreement with Mongolian government by March 2021. Within the agreement the govt. will begin construction of the coal-fired power station by July 2021.
The plant, being built to produce power to the Oyu Tolgoi project, is anticipated to be commissioned within the subsequent four years, the worldwide miner said. Until the commissioning of the state-owned plant, power supply to the mine and also the underground project will continue under this terms, it said. Rio had in March flagged slowing down operations at the Mongolian mine because of coronavirus restrictions.
The Oyu Tolgoi mine is a combined open put and underground mining project, located within the south desert. the positioning was discovered at the turn of 2001, constructed in 2010 and shipped its first batch of copper in 2013. Canadian-based Ivanhoe Mines discovered the gold-copper ore deposit in 2001, in a region where within the time of Genghis Kahn outcropping rocks were smelted for copper.
In 2010, the value of bringing the mine into production was 4.6 billion USD. This made it the most important project within the history of Mongolian mining. In 2013, the value had ballooned so rapidly, 10 million USD, there was serious concern from the Mongolion Government. Their 34% share borrowed from foreign investors with interest.
The mine is alleged to account for over 30% of Mongolia's GDP upon completion. In early 2010 global company Rio Tinto owned 22.4% of Oyu Tolgoi owner Ivanhoe Mines (now Turquoise Hill Resources), and gave both technical assistance and funding to the project. At the time Rio Tinto had the choice of skyrocketing their stake to 46.6%.
Copper production from top ten companies to increase by 3.8%
Copper production from the world’s top companies is set to increase by up to 3.8% this year, following a fall of 0.2% in 2020, GlobalData analysis reveals. Last year’s marginal slump saw production drop to 11.76 million tonnes (Mt).
The initial impact of the COVID-19 pandemic on mining operations was immense, however, six of the ten largest copper producers succeeded in increasing output last year. In 2021, copper production from the top ten copper companies is expected to bounce back, rising by up to 3.8%, to reach 12.2Mt, according to GlobalData, a leading data and analytics company.
The highest increase in copper production was by Canada’s First Quantum, which, despite all the challenges, reported 10.4% growth in 2020. The company’s Sentinel mine in Zambia and Cobre Panama were key contributors to this growth. While the latter remained under care and maintenance between April and August 2020, it delivered record production levels during the subsequent months.
Codelco, the world’s largest producer of the red metal used in electric vehicles, also bucked the trend.
Vinneth Bajaj, Associate Project Manager at GlobalData, commented: “Despite Codelco reporting over 3,400 active cases during July 2020, the company achieved 1.2% growth in its production in 2020. The company implemented a four-phase plan, as part of the COVID-19 measures, to ensure the health and safety of its employees, while also avoiding any significant impact to its copper output.”
Although the overall impact was minimal, declines in production were observed from Glencore (8.2%), Antofagasta (4.7%), BHP (3.9%) and Freeport McMoRan (1.3%). Reduced operational workforces due to COVID-19 measures, lower ore grades and production halts due to maintenance were the key disruptors to output during 2020.
The move towards electric vehicles and clean energy from renewables sources such as solar panels and wind turbines has driven the copper price to all-time highs. Copper has been among the best performers over the last month where metals ranging from aluminum to iron ore have surged to their highest prices in years. The rally is being fueled by stimulus measures, near-zero interest rates and signs that economies are recovering from the global pandemic.