Rio Tinto CEO Jean-Sebastien Jacques said it will take 10 years for any of the stakeholders to receive a dividend from the giant Oyu Tolgoi copper-gold mine in Mongolia.
Oyu Tolgoi is 34%-owned by the Mongolian government, while Rio Tinto's 51%-owned Turquoise Hill Resources Ltd. holds a 66% stake in the project.
Jacques said the planned US$5.3 billion underground expansion at the mine is a long-term project, as infrastructure construction will take five years, with production ramp-up to take another seven to nine years, Bloomberg News wrote Oct. 6.
"Until we get to a steady state, which is clearly 10 years down the road, we will not pay a dividend to anybody," Jacques was quoted as saying.
Initial underground production is expected in 2020 at an average copper grade of 1.66%, which is more than three times the open-pit grade. On average, Oyu Tolgoi is expected to produce 560,000 tonnes of copper per year between 2025 and 2030, and operate in the first quartile of the copper cost curve.
Jacques noted that Mongolia owes about US$1 billion to Turquoise Hill, which reported revenue of US$329.7 million from the mine in the second quarter of 2016.