Rio Tinto , majority owner and operator of Oyu Tolgoi, one of the world”s largest copper and gold mines, has spent months wrangling with the Mongolian government about plans to expand from an open pit into an underground operation.
Trafigura, which markets a wide range of metals including copper concentrate, referred to the off-take deal in its first fully public annual report since being set up 20 years ago.
“We also provide finance in exchange for long-term supplies. For instance, we recently signed an off-take agreement with Oyu Tolgoi in Mongolia,” it said, giving no further details.
Rio Tinto had no immediate comment on the Trafigura deal.
Rio put the mine”s $5 billion expansion on hold in July, saying the Mongolian government wanted parliament to approve the project”s financing. Mongolia hoped to resolve the dispute by early 2014, a government source told Reuters last month.
Fifteen banks that have agreed to finance the expansion have told Rio they will extend their commitments, which were due to expire at the end of the year, until next March, a statement said on Monday.
Trafigura also said the global copper market is expected to be broadly in balance next year as low inventories and a recovery in global growth offset stronger mine output.
“We don”t expect prices to rise markedly, but on the other hand, with concentrates trading at close to cost levels for some producing areas, a collapse in prices is also unlikely,” the Trafigura report said.
The benchmark copper price on the London Metal Exchange has shed 8.3 percent this year, weighed down by more output from new mines such as Oyu Tolgoi and improved operations at many existing mines.
