Tag Archives: Mongolia

Vuzix Smart Glasses keep Rio global teams connected at Oyu Tolgoi Underground

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Rio Tinto has deployed Vuzix Smart Glasses at the Oyu Tolgoi copper-gold mine in Mongolia to continue progressing the development of the underground project in the face of travel restrictions tied to COVID-19.

Vuzik, a supplier of smart glasses and augmented reality technology and products, says the company is using its smart glasses to enable technical experts from all over the world to work with local teams on the underground project.

Rio, in its 2020 Annual Report, said it had been increasing its use of drones and mine pit cameras, and introduced video headsets (including smart glasses) to conduct visual inspections of tailings facilities and equipment while complying with travel restrictions and physical distance requirements.

“Vuzix Smart Glasses usage continues to expand across an ever-widening array of industry verticals,” Paul Travers, Vuzix President and Chief Executive Officer, said. “Companies like Rio Tinto, which is a global leader in its field, continue to provide validation of the value and effectiveness of our products in real world situations.”

XCMG’s DL560 wheel bulldozer heads to Mongolia mining sector

Mining equipment, Mining services, , , , ,

XCMG says it has delivered a DL560 wheel bulldozer – its largest wheeled dozer – to a mining customer in Mongolia. The delivery, XCMG says, marks full access for the Mongolia mining industry to the company’s entire product line of large-tonnage loaders and wheel bulldozers.

The DL560 wheel bulldozer is XCMG’s latest generation product developed with a firm structure, strong power and high level of stability and safety. This model is designed to be the first-choice product for ports and large mines, which can help tackle mining challenges brought by complicated complex geological structures.

Wang Min, Chairman of XCMG, said: “We are privileged to provide the very best of XCMG’s innovation and quality for our partners in Mongolia, and we hope such cooperation can help Mongolia, the second largest landlocked country in the world, to further discover its mineral resources.

“Our products, such as the DL560 wheel bulldozer, have been widely used in the country. XCMG has the highest market share in Mongolia among all Chinese brands and is now becoming the first choice for the local Mongolian construction machinery industry.”

Functions of the DL560 wheel bulldozer worth highlighting include XCMG’s new FOPS and ROPS pressurised cab featuring a large space, which offers low noise driving experience with excellent sealing performance. A sound and light warning device incorporated by an advanced electronic monitoring system, as well as a full-hydraulic maintenance-free wet drive axle, enables fast response and safe driving, the company said.

In the meantime, XCMG says it is also taking “green action” by introducing a load-sensing variable hydraulic system to the DL560 model. This can reduce fuel consumption by 7% and prolong the lives of parts, according to the company. Double-pump confluence technology can also improve working efficiency and reduce energy loss.

To ensure the sustainable usage of XCMG’s products in Mongolia, XCMG has also established a large-scale spare part resource reserve and a local spare parts centre in the country, offering comprehensive aftersales support with ultimate service.

Oyu Tolgoi hits the Copper Mark

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Turquoise Hill Resources says the operator of the Oyu Tolgoi copper-gold mine in Mongolia has been awarded the Copper Mark, the copper industry’s new independently assessed responsible production program.

The Copper Mark is the first and only program for responsible production in the copper industry. Originally developed by the International Copper Association with inputs from a broad range of stakeholders including customers, NGOs and producers, the Copper Mark is now an independent entity with a multi-stakeholder council.

In August, Rio Tinto’s Kennecott site in the US became the first producer to be awarded the Copper Mark.

Oyu Tolgoi LLC met over 30 criteria for responsible environmental, social and governance (ESG) operating practices to hit the copper mark, Turquoise Hill said.

“At Turquoise Hill, we are fully committed to responsible production and transparency at Oyu Tolgoi,” Ulf Quellmann, Chief Executive Officer of Turquoise Hill Resources, the 66% owner of Oyu Tolgoi, said. “We congratulate Oyu Tulgoi on this prestigious award, which demonstrates our dedication to protecting the environment and safeguarding the health, safety and welfare of all workers and the local community. We are proud to be part of an operation that is leading the industry in ESG standards and contributing to the sustainable, long-term socio-economic development of Mongolia.”

Since 2010, Oyu Tolgoi has been developing a health, safety and environmental management system in compliance with IOS 14001 Environmental and OHSAS 18001 Occupational Health and Safety management standards. In 2013, Oyu Tolgoi was independently audited and received certification on these standards, Turquoise Hill said. As part of this program, Oyu Tolgoi has made a series of commitments about the way it operates, how it contributes to Mongolia’s society and economy, and how it manages environmental impacts, supporting the long-term development of Mongolia and sustainable supply chains.

Oyu Tolgoi loses some of its underground reserves following updated feasibility study

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An updated feasibility study on the development of the underground mine at Oyu Tolgoi, in Mongolia, has confirmed that the huge copper-gold project will be delivering sustainable production later than initially planned and this output will come with a higher capital expenditure bill.

Majority owned by Rio Tinto through its 66% stake in Turquoise Hill Resources, Oyu Tolgoi is currently being mined as an open-pit operation (producing 146,346 t of copper and 241,840 oz of gold in 2019), yet previous studies have indicated a combined open-pit and underground operation could up the tally to around 500,000 t/y of copper.

Back in July 2019, Rio Tinto included an update on the underground project saying first output was expected to be achieved between May 2022 and June 2023, a delay of 16 to 30 months compared with the original feasibility study guidance in 2016, while preliminary estimates for development capital spend was $6.5-$7.2 billion, $1.2-$1.9 billion up on the $5.3 billion previously disclosed.

The updated feasibility study issued this week from Oyu Tolgoi LLC (owned 66% by Turquoise Hill and 34% by the Mongolian government), which is in the process of being submitting to the Government of Mongolia in accordance with Mongolian regulations and standards that require mining companies to submit updated feasibility studies every five years, includes a delay of 21 to 29 months for first sustainable production compared to the original feasibility study guidance in 2016 and an increase of $1.3-$1.8 billion from the original $5.3 billion development capital.

This process has also seen 1.22 Mt of copper, 850,000 oz of gold and 7.01 Moz of silver removed from the Hugo Dummett North reserve base compared with the December 31, 2019 calculation, with some 80,000 t of copper, 70,000 oz of gold and 550,000 oz of silver added to the Hugo Dummett North Extension reserve base.

It also includes a new mine design for Panel 0 of the Hugo Dummett North underground mine at Oyu Tolgoi, as well as confirming that the caving method of mining remains valid.

Detailed study, design, engineering and optimisation work is ongoing to support the definitive estimate of Panel 0 for the development of this orebody, which remains due in the second half of 2020, Rio said.

These estimates are subject to any additional scheduling delays or increases in capital costs arising from the impacts of the ongoing COVID-19 pandemic, it added.

Back in July 2019, Rio said enhanced geotechnical and geological information obtained from drilling and mapping at depth suggested there may be some stability risks associated with the original mine design. This updated design was the result of a review of this information.

The updated design retains two in-situ rock pillars on either side of Panel 0 for geotechnical stability, whereas the original mine design had these pillars within the mining area. “The updated design is supported by extensive geotechnical modelling and industry leading technical assurance,” Rio said.

As a consequence of leaving the pillars in place, the material contained in the pillars has been reclassified from reserves to resources, Rio said, adding that part of the material contained in these pillars could be recoverable at a later stage following additional studies currently underway. This saw 2.43 Mt of copper, 570,000 oz of gold and 4.81 Moz of silver added to the July 3, 2020, Hugo Dummett North resource base.

Ore handling infrastructure will be relocated to the pillars, located immediately north and south of the current Panel 0 boundaries, Rio explained, with Panels 1 and 2 now be initiated as independent panels or mine blocks.

Optimisation of mine designs for Panels 1 and 2 is ongoing and it is anticipated that this next phase of study may result in further movements in classifications of reserves and resources, according to Rio.

Arnaud Soirat, Chief Executive of Copper & Diamonds, said: “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. We remain focused on delivering the underground project safely and within the guidance ranges we have announced on both cost and schedule.”

Rio, Turquoise Hill and Mongolia government find power solution for Oyu Tolgoi

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Rio Tinto, Turquoise Hill Resources and the Government of Mongolia have reached an agreement on the preferred domestic power solution for the Oyu Tolgoi copper-gold mine, in Mongolia, that, Rio says, paves the way for the government to fund and construct a state-owned power plant at Tavan Tolgoi.

The agreement, which is a revision of the Power Source Framework Agreement (PSFA) signed in 2018, states that the parties will work towards finalising a Power Purchase Agreement by the end of March 2021.

In addition, the amended PSFA sets a proposed timetable for development, with construction of the coal-fired power plant set to begin no later than July 1, 2021, and commissioning within four years thereafter.

Oyu Tolgoi is currently sourcing power from China’s Inner Mongolian Western Grid via overhead power lines, via a back-to-back power purchase agreement with National Power Transmission Grid JSC, the power importing entity, and the Inner Mongolian Power Company, according to Turquoise Hill.

Both the Government of Mongolia and Oyu Tolgoi have committed to extending the current arrangement to ensure continued stable power is supplied to the mine and underground project until the state-owned power plant is commissioned and is able to supply stable, reliable and continuous power, Rio said.

Back in February, Rio, which has a majority stake in Turquoise Hill, said it was continuing to progress options to secure domestically-sourced power for Oyu Tolgoi as part of an obligation to source power by June 30, 2023, under the 2009 Investment Agreement between Turquoise Hill (which owns 66% of Oyu Tolgoi), the Government of Mongolia and Rio, and the subsequent PSFA signed in 2018.

Arnaud Soirat, Rio Tinto Copper & Diamonds Chief Executive, said: “This agreement provides a potential pathway to securing a domestic power supply for the Oyu Tolgoi mine and underground project for the benefit of all shareholders and the wider community. We look forward to working with the Government of Mongolia to progress the solution.”

Oyu Tolgoi produced 146,346 t of copper and 241,840 oz of gold in 2019, with mill throughput running at 40.78 Mt for the year.

Rio, Turquoise Hill put forward coal power plant option for Oyu Tolgoi

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Rio Tinto says it is continuing to progress options to secure domestically sourced power for its majority-owned Oyu Tolgoi copper mine in Mongolia.

The mining major’s domestic search for energy is part of an obligation to source power by June 30, 2023 under the 2009 Investment Agreement between Turquoise Hill Resources (which owns 66% of Oyu Tolgoi), the Government of Mongolia and Rio Tinto, and the subsequent Power Sector Framework Agreement signed in 2018.

In compliance with these agreements, Oyu Tolgoi LLC has submitted to the Government of Mongolia a feasibility study for the Tavan Tolgoi Power Plant (TTPP) project, which involves building a 300 MW coal power plant. This plant, to be located in Tsogttsetsii soum of Umnugovi province, comes with a total project cost estimate of up to $924 million, pending consideration of certain amounts yet to be finalised, Turquoise Hill said. Rio says this amount is already included in the group capital expenditure guidance of $7 billion in 2020 and $6.5 billion each in 2021 and 2022.

In parallel with the TTPP project, and in consultation with the Government of Mongolia, Rio Tinto is also progressing alternative options to source domestic power, including a renewable power component, Rio said.

Oyu Tolgoi is currently sourcing power from China’s Inner Mongolian Western Grid via overhead power lines, via a back-to-back power purchase agreement with National Power Transmission Grid JSC, the power importing entity, and the Inner Mongolian Power Company, according to Turquoise Hill.

Rio Tinto Copper & Diamonds Chief Executive, Arnaud Soirat, said: “Rio Tinto, Turquoise Hill and the Government of Mongolia are all committed to securing a reliable and long-term domestic power source for the Oyu Tolgoi mine and are working together to achieve this.”

Barloworld makes plans to establish Eurasia equipment unit

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Barloworld says its Mongolia subsidiary has entered into an agreement to acquire 100% of Wagner Asia Equipment and 49% of SGMS LLC to help establish a new Eurasia-focused equipment unit.

The Caterpillar dealer has agreed to pay $216.8 million as part of the transaction, which will see the remainder of SGMS continue to be held by Battur Battulga, a Mongolian citizen actively involved in managing SGMS, which, Barloworld says, supplies equipment, parts and services to a key customer.

Through Wagner International LLC and its subsidiaries, the Wagner family have been doing business in Mongolia for over 22 years and are a long-standing Caterpillar dealer in selected states in the US.

Wagner Asia Equipment is engaged in the business of selling and distributing construction equipment, mining equipment, power systems, and related goods and services in Mongolia, primarily under the Caterpillar brand, according to Barloworld. It recently presented four 55 t CAT773 E dump trucks to Ulz Group, a Mongolia-based company focused on mining, exploration and construction (ceremony pictured).

Barloworld, in a SENS release, said it had consistently stated its desire to allocate capital to opportunities that complement its competencies as part of its medium-term strategy.

“The group balance sheet is strong and this opportunity, adjacent to the current Russian operation, presents an attractive growth prospect within the Equipment division,” it said. “The Wagner Asia Equipment business will be combined with the current Barloworld Russian business unit into a newly formed Equipment Eurasia unit.”

The proposed transaction is subject to the following outstanding conditions:

  • The conclusion of various agreements with Caterpillar Inc (or an associated entity) in respect of the Caterpillar dealership in Mongolia;
  • The carve-out, exclusion or transfer of non-core assets, liabilities, agreements, customers and debtors held by Wagner Asia Equipment prior to completion of the proposed transaction;
  • Obtaining the consent and associated waiver of Battur Battulga to the proposed transaction and the entry into of a new shareholders’ agreement;
  • Obtaining the consent(s) and/or waiver(s) from certain third parties in respect of certain rights arising from the change of control contemplated by the proposed transaction; and
  • Gaining the necessary board approvals of the seller, the purchaser and Barloworld.

The proposed transaction is expected to complete on or about April 1, 2020, with a long stop date of October 1, 2020, Barloworld says.

Major Drilling helping narrow down Oyu Tolgoi orebody

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Major Drilling says it is nearing the completion of a cave tracking system installation at the Turquoise Hill Resources and Mongolia government-owned Oyu Tolgoi copper-gold mine, in Mongolia.

In early 2000, Major Drilling established a drilling campaign in the middle of the Gobi Desert, with operational supplies needing to ramp up to support 20 rigs that were transported to the site.

This drilling work has since evolved into the tracking system that has proven successful in the block cave operation.

These trackers are lowered through a specially-drilled borehole into the Oyu Tolgoi orebody below. Block cave magnetic beacons are embedded into the orebody and spun to create a magnetic field.

“Magnetisation has been found to be the most effective way to track the fragmentation as an orebody caves in allowing loaders to mine the ore from draw points deep underground,” Major Drilling said.

Major Drilling’s teams strategically place magnetic beacons throughout the mine to create a 3D map and to track the position of the orebody cave-in flow. The cables are attached to the duct rodder, which is lowered from a winch system. Once the trackers are placed, block caving techniques will undercut and fragment the deepest points of the geology, according to the company. The orebody is then collected and taken away for processing.

“Block caving is a low-cost mining method used for the development of massive ore deposits,” Major Drilling says. “Mine planners often use an experienced specialised drilling company to precondition the block cave mining area through hydrofracking. Tracking the flow of the fragmented, caved ore is a critical part of accessing targeted orebodies.”

Mine planners use the information from the magnetic tracking devices placed by the Major Drilling team to understand the direction of intended failure the stone is moving.

Shaun Hogan, Major Drilling’s Project Manager at Oyu Tolgoi, said: “We are nearing the completion of the cave tracking system installation at Oyu Tolgoi. Over the past two years, we have worked very closely with our client and various stakeholders; this partnership has achieved a successful deep tracking network.”

In addition to block cave tracking, Major Drilling also performs seismic monitoring to help predict rock mass instabilities. Seismic monitoring is another specialised drilling service that makes large-scale block cave work safer and more productive.

Major Drilling was awarded the Rio Tinto Growth & Innovation Group Award for the successful seismic drilling program at Oyu Tolgoi in 2017.

XCMG bolsters Mongolia offering with spare parts centre

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XCMG has opened its first spare parts centre in Ulaanbaatar, Mongolia, in an effort to provide “all-around support and services” for customers in the country.

The new centre will connect with the Xuzhou Headquarters, Erenhot Distribution Center and mining districts’ On-site Support Warehouses to create a complete “sale-support-repair” service, it said. This will provide “high-quality equipment, flawless support in operation and guarantees for equipment throughout the entire life cycle of XCMG’s products”, the company said.

XCMG’s Song said: “As Mongolia accelerates the construction of infrastructure over the next decade, XCMG will be on-hand to help develop the local market. With our new service centre and complete solution, there will be no limit to what we can build together.”

The company’s exports to Mongolia are increasing year by year, XCMG said, with the total number of machinery shipped to Mongolia up to July 2019 already exceeded the total for 2018, according to recent customs reports. “The dramatic increase underlines the position of XCMG’s large-tonnage mining excavators, loaders, graders and mining trucks as the top choice for operators in Mongolia,” XCMG said.

To meet the ever-growing demand for spare parts support and services, XCMG initiated the spare parts centre project with local dealer AODE in April. Some 20 million yuan ($2.9 million) was invested to construct the 2,000 sq.m site located in Ulaanbatar. This will significantly improve XCMG’s ability to provide spare parts services in Mongolia and its neighbouring region, as well as better sales services in Middle Asia, the company said.

Wang Min, Chairman and CEO of XCMG, said: “XCMG is committed to providing excellent products and service to all our customers, service is part of the product itself, and XCMG will invest heavily to create a global spare parts network and standard service procedures to win customers’ trust.”

Rio revises Oyu Tolgoi cost and production estimates on rock stability issues

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Rio Tinto has provided an update on its majority-owned Oyu Tolgoi copper-gold underground project, in Mongolia, admitting that stability risks identified with the previously approved mine design has led to an estimated cost increase and delay to first production.

First output is now expected to be achieved between May 2022 and June 2023, a delay of 16 to 30 months compared with the original feasibility study guidance in 2016, while preliminary estimates for development capital spend is now $6.5-$7.2 billion, $1.2-$1.9 billion up on the $5.3 billion previously disclosed.

These estimates are preliminary in nature – the equivalent of a conceptual or order of magnitude study – but Rio said a definitive estimate should be forthcoming in the second half of 2020.

Oyu Tolgoi Underground is Rio’s major copper growth project. When the underground mine is fully ramped up, the existing open pit and underground, combined, are expected to produce more than 500,000 t/y of copper.

Alongside this announcement, Rio Tinto also published its June quarter production results, which showed Rio’s share of production of the Oyu Tolgoi open-pit mine was 13,100 t of copper over the period.

Since February, key below ground infrastructure such as the control room facility and the jaw crusher system have been completed and construction of shafts 3 and 4 is progressing well, according to Rio. The commissioning of shaft 2 remains on track for October 2019.

As Rio previously advised, enhanced geotechnical information and data modelling suggests there may be some stability risks identified with the approved mine design. As a result, several other mine design options are under consideration to complete the project.

Rio said: “Studies to date indicate that these options may result in some of the critical underground infrastructure, such as the mid-access drive and the ore handling system, being relocated or removed. Options relating to the sequence of crossing the panel boundaries during mining operations are also being analysed.”

These options are being evaluated to determine the final design of the first panel of mining, “Panel 0”, with the work anticipated to continue until early 2020, Rio said. This is where the definitive estimate date of the second half of 2020 comes from. This estimate will include the final estimate of cost and schedule for the remaining underground project and the preferred mine design approach.

Rio said: “All options under consideration present a pathway to sustainable first production, and have different cost and schedule implications. To date, these have been defined to a level of accuracy associated with a conceptual study or order of magnitude study, and, therefore, significantly more work is required to complete the final assessment.”

Preliminary information now suggests, depending on which mine design options are adopted, first sustainable production could be achieved between May 2022-June 2023. This range includes contingency of up to eight months reflecting the “unexpected and challenging geotechnical issues, complexities in the construction of shaft 2 and the detailed work still required to reach a more precise estimate”, Rio said.

The company added: “The company will continue to focus on minimising the impact to project schedule and cost, as it works through the detailed analysis and testing of each mine design option. Although further work is necessary to reach definitive conclusions, Rio Tinto is reviewing the carrying value of its investment in the project and will announce if any changes are required in the half year results on August 1, 2019.”

Stephen McIntosh, Group Executive, Growth & Innovation, said: “We have made significant progress on a number of key elements in the construction of the underground project during 2019. However, the ground conditions are more challenging than expected and we are having to review our mine plan and consider a number of options. Delays are not unusual for such a large and complex project, but we are very focused as a team on finding the right pathway to deliver this high value project.”

Arnaud Soirat, Chief Executive, Copper & Diamonds, said: “Oyu Tolgoi is a world-class orebody and a world-class business that is already producing copper, employing around 16,000 people and benefitting Mongolia through taxes, royalties and significant procurement. We are working with Turquoise Hill Resources and the Government of Mongolia to complete the underground, which will unlock the most valuable part of the mine for the benefit of all stakeholders.”

Oyu Tolgoi is owned 66% by Turquoise Hill Resources (THR) and 34% by the Mongolian government, with Rio Tinto holding a majority stake in THR.