Turquoise Hill Resources Ltd. announced yesterday that, in light of the progress made in the ongoing negotiations between the Government of Mongolia, Rio Tinto and the Company, the Board of Directors of OT LLC approved a bridging budget of USD 75 million to continue to progress critical activities in the Oyu Tolgoi underground mine development project. The Company expects that the approved increase should be sufficient to sustain work on the development of the OT underground mine up to mid January 2022.
While the Company believes that the decision to approve the bridging budget was a necessary and positive step in the near term, the Company cautions that there can be no assurance that the OT Board will approve any future necessary additional investments to further progress underground development and accordingly OT LLC remains at risk of having to slow down further work on the underground development.
Last week, Rio Tinto Ltd boss Jakob Stausholm has made his first trip to Mongolia while in the top job to meet Prime Minister L.Oyun-Erdene as Rio looks to revive a relationship that has soured over the development of a big copper mine.
Rio has faced costly delays at the underground expansion of its Oyu Tolgoi project that it has blamed on geotechnical difficulties and COVID-19, angering the Mongolian government and shareholders of developer Turquoise Hill Resources TRQ.TO in which Rio has a majority stake.
Rio last month delayed first production at the underground development of Oyu Tolgoi by three months to January 2023, after Turquoise had estimated additional funding required for the project had ballooned to $3.6 billion.
Delays to development of what will be one of the world’s largest copper mines has antagonised the Mongolian government, which owns a 34% stake, and fuelled a funding spat between Rio and Turquoise Hill.