Multi-million problems at Mongolia’s top mine - News.MN

Multi-million problems at Mongolia’s top mine

Old News! Published on: 2019.08.01

Multi-million problems at Mongolia’s top mine

Turquoise Hill Resources has recorded a $US596.9 million ($873 million) impairment against the carrying value of Mongolia’s Oyu Tolgoi copper and gold mine.

Turquoise Hill is 50.79 per cent owned by Rio Tinto, and Thursday’s confirmation of an impairment came just hours before Rio was due to publish its half-year financial results on Thursday afternoon.

The impairment has been forced by cost and schedule blow outs on an underground expansion of Oyu Tolgoi, which are expected to prompt a blowout of between $US1.2 billion and $US1.9 billion above the original project budget of $US5.3 billion.

First production from the expansion could be delayed by up to 30 months, Rio and Turquoise Hill warned in July.

Documents published by Turquoise Hill on Thursday indicated that the bulk of the impairment ($US364.7 million) was recorded against “capital works in progress”.

A further $US180 million was recorded against the carrying value of plant and equipment, while Turquoise Hill also wiped $US52 million off the value of its “mineral property interests”.

Rio and Turquoise Hill have started a major rethink of the underground mine plan, and are not expected to settle on a new development plan until late 2020.

The impairments dragged Turquoise Hill to a $737.6 million loss for the three months to June 30. Tax matters also contributed to the loss for the period.

Turquoise Hill owns 66 per cent of the Mongolian company that owns the mine, Oyu Tolgoi LLC, with the Mongolian government owning the other 34 per cent. (Financial review)

For your Reactions?
1
PoopPoop
0
HeartHeart
0
HahaHaha
0
LoveLove
0
WowWow
0
YayYay
0
SadSad
0
AngryAngry
Voted Thanks!

Related News