Rio Tinto slashes estimates at Oyu Tolgoi after mine redesign

Australian miner Rio Tinto slashed copper reserve forecasts at its Oyu Tolgoi mine in Mongolia after design plans had to be redrawn due to more risks of rock instability.

Rio said it estimated first production from its mine between October 2022 and June 2023, 21-29 months later than initial estimates.

The study also confirmed earlier forecasts that the expansion would be $1.3bn - $1.8bn higher than initial estimate of $5.3bn.

An updated feasibility study revealed a 17% cut in recoverable copper reserves from the mine's main deposit as the new plans required leaving more ore in place to make the mine more stable.

"This amended mine design is another positive step in the development of the underground mine which will unlock the most valuable part of Oyu Tolgoi," said chief executive of copper and diamonds Rio’s Arnaud Soirat.

“We remain focused on delivering the underground project safely and within the guidance ranges we have announced on both cost and schedule."

"It is expected that part of the material contained in these pillars will be recoverable at a later stage following additional studies which are currently underway.”

The expansion project would make the mine one of the world's largest sources of copper, producing more than 500,000 tonnes a year. Oyu Tolgoi is 34% owned by the Mongolian government and 66% by Turquoise Hill Resources, in which Rio Tinto has 51%.