Management of the Oyu Tolgoi copper mine in Mongolia plans to consider alternative power supply options for the operation, noting that the proposed power plant at the nearby Tavan Tolgoi coal mine is not likely to be completed in time, Reuters reported Feb. 23.
Rio Tinto, the majority owner of the copper mine, is seeking a new power plan for Oyu Tolgoi after the Mongolian government canceled a power sector cooperation with the mining giant last week. The government still wants the company to source power locally, in accordance with the canceled deal.
Earlier this week, Mongolian Energy Minister Tserenpil Davaasuren suggested that the proposed power plant at Tavan Tolgoi could supply electricity to Oyu Tolgoi if Rio Tinto could guarantee funding for the project.
Apart from the timing concerns, Oyu Tolgoi LLC said the plant lacks a lead investor and funding would entail "extensive negotiations and lender due diligence," further extending the development period.
Among other options being considered is developing a power plant on the Oyu Tolgoi property, though the construction would not be covered by the approved US$5.3 billion budget for the underground expansion at the mine. Rio Tinto's Oyu Tolgoi stake is held through its majority-owned Turquoise Hill Resources Ltd. unit.