Rio Tinto says Mongolia project timeline up in the air amid coronavirus

Rio Tinto announced on Monday that it is working with the Government of Mongolia to ensure its Oyu Tolgoi operation meets the restrictions put in place to contain the spread of the Covid-19 coronavirus.

The FTSE 100 mining giant said its first priority was the health and safety of all of its employees, contractors and the wider community.

It said that since January, the movement of goods and people within Mongolia had been restricted within and across its border, which had further escalated recently as the first case of Covid-19 had occurred in the country.

It said work on the underground project was continuing, although progress was being slowed as a result of the measures.

There was restricted access for teams from Rio Tinto, Oyu Tolgoi and its construction partners to oversee development, and provide specialist technical services.

The availability of specialist service providers at the site was “essential” to safely continue work on technical activities, such as the headframe commissioning of shafts three and four.

Rio Tinto said the full impact of the slowdown on the project was unknown at the current time, adding that it would update the market once more information is available.

The mine design for the underground project currently remained on track to be completed in the first half, with a definitive estimate to be provided for the development of the “world-class orebody” in the second half of 2020.

Despite the impact of Covid-19, Rio Tinto said the open pit of the Oyu Tolgoi mine was still operating and delivering shipments of copper concentrate to customers.

“Our focus is on ensuring the safety and health of all of our people at Oyu Tolgoi and we support the decisive action taken by the government to limit the spread of Covid-19,” said Rio Tinto Copper and Diamonds chief executive Arnaud Soirat.

“It has inevitably resulted in a restriction on the movement of goods and people in the country and this is slowing down construction activity at the underground project.”

Soirat said it was “too early” to determine the full impact, adding that the team was doing “all they can” to minimise the disruption in a challenging environment.

“We will continue to work with our suppliers, customers and the government.”

At 0901 GMT, shares in Rio Tinto were down 3.76% at 3,151p.