Name of the Project
Oyu Tolgoi underground mine project.

Location
Mongolia.

Project Owner/s
Oyu Tolgoi LLC (OTLLC) Towns and operates the Oyu Tolgoi mine and is jointly owned by Rio Tinto (66%) and the government of Mongolia (34%).

Rio Tinto has beneficial ownership of common shares of Entrée Resources, held by its wholly owned subsidiary Rio Tinto International Holdings Limited.

As a result of its shareholding exceeding 50% in Turquoise Hill Resources (TRQ), Rio Tinto is deemed to beneficially own the common shares of Entrée, owned by TRQ under applicable Canadian securities law.

Project Description
Oyu Tolgoi encompasses a series of deposits containing copper, gold and silver. The deposits stretch more than 12 km, from the Hugo Dummett North Zone in the north through the adjacent Hugo Dummett South Zone, down to the Oyut Deposit, and extending to the Heruga Deposit in the south.

More than 80% of Oyu Tolgoi’s total value lies deep underground. The underground project is a significant development aiming to access and mine the high-grade orebody at the upper lift of Hugo North. Average copper grades of 1.66% are expected over the mine life.

The underground project entails sinking 6.1 km across five shafts and mining 203 km of tunnel at a depth of 1.3 km. Other supporting infrastructure includes crushing and materials handling and surface facilities.

The project will use block caving mining methods. Block caving uses the force of gravity to extract ore from an underground deposit.

The Oyu Tolgoi concentrator covers an area 255 m long and 144 m wide. The concentrator produced its first copper concentrate in February 2013 and started shipments to customers in July 2013. The concentrator can process up to 100 000 t/d of ore. The plant will be upgraded during underground construction to handle higher-grade ore and increased production.

Potential Job Creation
Not stated.

Net Present Value/Internal Rate of Return
The project has an expected internal rate of return of more than 20%.

Capital Expenditure
The capital forecast for the project is $7.06-billion, an increase of $300-million against the 2020 definitive estimate, owing largely to Covid-19 disruptions.

Planned Start/End Date
The operation is expected to ramp up to deliver average mined copper production of about 500 000 t/y (100% basis) between 2028 and 2036.

Latest Developments
Rio Tinto’s Oyu Tolgoi has approved a shift in its underground development strategy, pausing work in the Entrée Resources joint venture (JV) area and bringing forward development in Panel 2 South, citing delays in licence transfers.

The Oyu Tolgoi board has approved an alternative mine plan that shifts away from Panel 1, which includes the Entrée JV area that would have supported production from 2027 under the existing mine plan.

While limited development will continue in areas of Panel 1 that lie outside the JV boundary, resources will be reallocated to accelerate work in Panel 2 South, which is not affected by the licences.

“With lateral development work only just beginning in Panel 1, this is the right time to pivot and bring forward development in Panel 2 South to maintain our options," Rio Tinto Copper chief executive Katie Jackson has said.

The mine’s long-term production target of 500 000 t/y of copper from 2028 to 2036 remains unchanged. Panel 0 and Panel 2 are expected to contribute to output in 2025 and 2026, aligning with Rio Tinto’s copper guidance of 780 000 t to 850 000 t for 2026.

“Transferring the licences for the Entrée JV area will maximise the value Oyu Tolgoi delivers for all parties, and we are continuing to work with the government of Mongolia and Entrée Resources towards this outcome,” Jackson has said.

Entrée president and CEO Stephen Scott has expressed his disappointed that the Toronto-listed company has not achieved a timely transfer of title from Entrée to OTLCC, stating that the transfer process started in February this year.

"The parties have always intended for OTLLC, the 80% owner and manager of the Entrée/Oyu Tolgoi JV, to hold title to the Shivee Tolgoi and Javkhlant mining licences on behalf of the JV participants. It is a requirement of the 2008 JV agreement and contemplated in the 2009 Oyu Tolgoi investment agreement. Entrée and OTLLC commenced the transfer process in February 2025 and will continue to work with representatives of the government of Mongolia to complete the transfers as soon as possible in accordance with applicable laws of Mongolia,” Scott has indicated. 

Key Contracts, Suppliers and Consultants
Jacobs Engineering (engineering, procurement and construction management) and Cimic Group’s Thiess (underground decline contractor).

Contact Details for Project Information
Rio Tinto (Mongolia) , tel +976 11 331880 or email online@ot.mn.