Tag Archives: Oyu Tolgoi

Oyu Tolgoi adopts Cohda Wireless V2X vehicle positioning solution

Cohda Wireless is applying its vehicle positioning solution at the Oyu Tolgoi mine in Mongolia aiming to drive safety and productivity in an initiative that could pave the way for, it says, a new industry standard.

Cohda Wireless is headquartered in Australia and has offices in Europe, the US and China. Its V2X (Vehicle-To-Everything) technology connects vehicles with each other and with roadside infrastructure to create a cooperative and intelligent transport environment, the company says.

Now, its V2X-Locate technology is being deployed at the Rio Tinto-managed copper and gold mine in Mongolia to provide “unheralded vehicle and personnel location accuracy”, Cohda says.

This solution was initially developed to solve the vehicle positioning accuracy challenges inherent in the urban canyons of cities where large buildings, underground car parks and tunnels interfere with GNSS signals. Using DSRC (dedicated short-range communication) signals, Cohda’s signal processing and positioning algorithms provide accurate vehicle position irrespective of GNSS availability and/or quality and is therefore suited to mining environments.

As Russell Kennett, Manager Underground Technology at Oyu Tolgoi explains, Cohda’s technology has now been adapted to serve a mining environment for the first time.

“Cohda’s V2X-Locate allows all equipped mobile fleet, fixed plant and personnel to be reliably tracked in real time to sub-metre accuracy in a GNSS-denied environment, to prevent incidents and assist in emergency evacuations and to enable traffic management and schedule optimisation,” he said.

Cohda Wireless CEO, Dr Paul Gray, said the widespread adoption of connected, intelligent transport solutions in the mining sector will greatly reduce the risk of injury or death and will also drive productivity gains.

“The system can integrate and manage location data from multiple sensor types with sub-metre accuracy throughout the mine site and is a significant improvement on using a combination of disparate collision avoidance systems across the mining environment, as is usually the case,” he says.

“When you have hundreds of vehicles and personnel operating in close proximity underground, a metre matters! And, whilst the prevention of injury and death is always the top priority, we also know that the ability to visualise, optimise and monitor vehicles brings significant operational benefits and efficiencies.”

A Cohda V2X-Locate system is in place and ready to go live at Oyu Tolgoi. Over 200 mining vehicles of all types are being fitted with Cohda’s XBU-V specially adapted On-Board units, which connect vehicles to each other and to XBU-I Road-Side Units that are installed in mine tunnels. Over 2,000 personnel will use V2X-Locate compatible cap lamps so that the collective system can use time-of-flight analysis of wireless signals to resolve spatial locations, the company explained.

Mining vehicles are fitted with a human machine interface that will notify operators of potential collisions. The system supports EMESRT Level 7 (Alert) and partial Level 8 (Advise) controls with full Level 8 controls and Level 9 (Intervention) controls on the Cohda product roadmap, it said.

Kennett believes this deployment could be instrumental in adopting an industry peer-to-peer communications and location standard.

“This project allows us to benefit from a highly tested, future-proofed, automotive-level safety technology that has proven reliability, scalability and robustness,” he says. “This potentially opens the door for the introduction of mine-wide peer-to-peer V2X networks that OEMs and vendors can integrate into their products to ensure interoperability regardless of the setting.”

Turquoise Hill and Rio Tinto sign Oyu Tolgoi UG funding HoA, agree to end arbitration

Turquoise Hill Resources and Rio Tinto have entered into a binding Heads of Agreement (HoA) to provide an updated funding plan for the completion of the Oyu Tolgoi underground copper-gold project in Mongolia.

The funding plan is designed to address the estimated remaining funding requirement of around $2.3 billion and replaces the non-binding Memorandum of Understanding that Rio and Turquoise Hill previously entered into on September 9, 2020.

Under the HoA, subject to securing approval by Oyu Tolgoi LLC, the project joint venture, and any required support from the Government of Mongolia, Turquoise Hill and Rio Tinto will:

  • Pursue re-profiling of existing project debt to better align with the revised mine plan, project timing and cash flows to reduce the currently projected funding requirements of OT by up to $1.4 billion; and
  • Seek to raise up to $500 million in senior supplemental debt (SSD) under the existing project financing arrangements from selected international financial institutions.

In addition, Rio Tinto has committed to address any potential shortfalls from the re-profiling and additional SSD of up to $750 million by providing a senior co-lending facility on the same terms as Oyu Tolgoi’s project financing, while Turquoise Hill has committed to complete an equity offering of up to $500 million.

An updated feasibility study on the underground expansion at Oyu Tolgoi from June 2020 included a delay of 21 to 29 months for first sustainable production compared with the original 2016 feasibility study guidance and an increase of $1.3-$1.8 billion from the original $5.3 billion development capital. The process also saw 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.

Since this announcement, Rio, Turquoise Hill and the Government of Mongolia have been trying to agree on a new funding pact for the sustainable development of the underground operation, which, in combination with open-pit mining, could produce around 500,000 t/y of copper at full capacity.

Steve Thibeault, Interim Chief Executive Officer of Turquoise Hill, said: “We are pleased to have reached a constructive and equitable agreement with Rio Tinto to fund the Oyu Tolgoi underground development. With a binding funding agreement now in place that sets out a process along a known timeline, we will be able to move ahead as expeditiously as possible with the development of the underground project at Oyu Tolgoi.

“We remain committed to continue delivering a benefit to all stakeholders, including Mongolia and its citizens, and to delivering significant long-term value for Turquoise Hill as this project progresses.”

Rio Tinto Copper Chief Executive Bold Baatar, added: “This agreement and alignment with Turquoise Hill represents a major milestone in the continued development of Oyu Tolgoi, which is expected to become one of the world’s largest copper mines and a significant contributor to the Mongolian economy for years to come. Commencing the re-profiling whilst concurrently listening, engaging and resolving the concerns of the Government of Mongolia are critical steps to maintaining momentum on the timely delivery of the Oyu Tolgoi Underground project.”

Following the HoA, Turquoise Hill and Rio have agreed to obtain an order dismissing the current arbitration on a “without prejudice basis” and without costs, including an order vacating the interim measures order, the companies said.

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

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.”

Oyu Tolgoi hits the Copper Mark

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

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

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

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.”

Major Drilling helping narrow down Oyu Tolgoi orebody

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.

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

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.

Autonomous drill rigs, Oyu Tolgoi recognised in Epiroc awards

Epiroc’s first annual awards have recognised close customer collaboration in Mongolia and innovative autonomous drill rigs in Australia.

Its “United in Performance Award” honours exceptional customer collaboration, the company said. This inaugural award is presented to Anders Berglund, Bayar Torguud, Batzorig Jamsranjav and Alf Lawrence at Epiroc’s Customer Center in Mongolia, as well as to mining company Oyu Tolgoi LLC.

“Their far-reaching collaboration is boosting productivity and safety at Oyu Tolgoi’s major copper mine,” Epiroc said. “With the mine located remotely in the South Gobi desert, Epiroc has developed strong local service capabilities, yielding customer benefits such as on-time spare parts delivery. The companies are emphasising safety and diversity and they have successfully worked together to recruit more women as equipment operators and service technicians.”

The Inspired by Innovation Award, meanwhile, recognises Epiroc’s most innovative technical development that has had a proven commercial success.

It has been presented, this year, to Tyler Berens, Tim Ledbetter and Dustin Penn at Epiroc’s Drilling Solutions division, Lars Eriksson at the Rocktec division, and to Adrian Boeing at the Customer Center in Australia for developing and deploying autonomous Pit Viper drill rigs for BHP.

A fleet of Pit Vipers is operating remotely at iron ore mines in the Pilbara region, some 1,300 km away from the office building in Perth, Western Australia, where BHP’s operators are located.

“This automation solution brings strong customer benefits, including improved work environment, higher productivity and lower operating costs,” Epiroc said.

Back in December, the first autonomous Epiroc Pit Viper 271 drill rig broke ground at BHP’s South Flank iron ore project in Western Australia. This was the first of five autonomous drill rigs to operate at the mine, all of which will be controlled remotely.

Per Lindberg, Epiroc’s President and CEO, said of the awards: “We are proud of our strong teams that continuously focus on making customers more productive and safe while lowering their operating costs. Automation and proactive customer collaboration are two important ways to achieve this.”

The awards will be presented to the winners at the company’s Annual General Meeting on May 9.