Tag Archives: Oyu Tolgoi

Oyu Tolgoi power solution is on the cards

Turquoise Hill Resources has announced the signing of a Power Source Framework Agreement (PSFA) between Oyu Tolgoi and the Government of Mongolia.

The PSFA provides a binding framework and pathway forward for the construction of a Tavan Tolgoi-based power project, as well as the basis for a long-term domestic power solution for the copper-gold mine, Turquoise Hill said.

Ulf Quellmann, Chief Executive Officer of Turquoise Hill, said: “We are encouraged by the pivotal decision to proceed with the power project at Tavan Tolgoi. Resolving Oyu Tolgoi’s long-term power requirements is critically important to the mine’s long-term development and today’s signing of the PSFA is a positive milestone toward that goal.

“We will continue to work closely and collaboratively with our partners to finalise the details of the power project, which will allow this truly great world-class asset to achieve its full potential for the benefit of all stakeholders.”

The PSFA formalises the role of each party and sets out an amended timetable for Oyu Tolgoi to source power domestically, according to the company. Construction is expected to start in 2020 following further studies and commissioning of the power plant is scheduled for mid-2023.

Oyu Tolgoi will now move forward to confirm the technical design of the project and finalise the commercial arrangements, including financing, underpinning the PSFA, the company said.

The 300 MW plant will be majority owned by Oyu Tolgoi LLC, 51%-owned by Turquoise Hill, and will be situated close to the Tavan Tolgoi coalfields.

Turquoise Hill Resources is 51%-owned by Rio Tinto.

Condra Cranes to speed up Shaft 6 work at Oyu Tolgoi

Oyu Tolgoi’s copper-gold underground development in Mongolia is set for a boost after its owners ordered two portal machines from South Africa’s Condra Cranes & Hoists.

The pre-sinking phase at OT’s Shaft 6 will use “advanced techniques enabled by pioneering crane design”, Condra said.

Pre sinking is expected to be completed in less than a quarter of the time considered the norm – four months instead of the usual eighteen, the company said.

“The Condra portal is radically different from the level-luffing type of crane traditionally used for pre sinking. Instead, a high-speed, high-lift main hoist removes excavated material vertically, by kibble, through an opening in the centre of a drilling stage positioned by two separate stage winders mounted on the same portal frame,” Condra said.

The portal machines come with a lift speed of one metre per second, 15 times faster than the four metres per minute found in standard mine workshop applications, according to the company.

The advanced portal design was researched during 2013 for incorporation in a prototype machine used at a new diamond mining shaft the following year.

In addition to an innovative frame design and dramatically increased lift speed on the main hoist, the portal crane also incorporates improved drives, gearboxes and safety devices, better cabin access and enhanced operation by remote control.

During the pre-sink phase at OT, the machines will stand over the mouths of the main and auxiliary rescue shafts, and remain in place until the shafts have been drilled, blasted, supported, cleaned and lined with concrete.

Oyu Tolgoi is a combined open-pit and underground project located some 550 km south of Monglia’s capital, Ulaanbataar. It is owned 66% by Turquoise Hill Resources (THR) and 34% by the Mongolian government, with Rio Tinto holding a majority stake in THR.

When the underground mine is fully ramped up in 2027, Oyu Tolgoi is expected to produce more than 500,000 tonnes of copper a year.

Condra began manufacture of the first of the portals for Oyu Tolgoi in early July, when the long-lead assemblies order was received. The main order was received on July 24.

Oyu Tolgoi’s pre-sink cranes will be bigger and faster than the diamond mining machine (pictured), and will feature improved electronics, Condra said. Importantly, lifting speed of the 160 kW 15-t main hoist on the new portals will double to 60 m/min.

The portal frame itself will comprise a 14-m high, 12-m span extended by 3.2-m cantilevers on both sides to allow excavated material to be moved to dump trucks using roads adjacent to the shaft. Stairwells will replace the cat ladders of the diamond mine portal.

Below-ground lift height will be 100 m, and the complete machine will weigh 88 tonnes.

Completion of both cranes, the design of which makes provision for disassembly and containerisation, is scheduled for early November. They will be shipped to Mongolia via China.

Rio updates on Koodaideri, AutoHaul, Amrun and OT underground in H1 results

Rio Tinto has released its financial results for the first half of the year and the company looks to be balancing profitability, growth investment and shareholder returns.

With EBITDA of $9.2 billion, up 2% year-on-year, operating cash flow of $5.2 billion and the same amount of net debt, the company has flexibility when it comes to where to put its money.

A number of sizeable divestments completed in the first half of the year – tied to coal and aluminium – have allowed the company to pay a $7.2 billion record interim dividend, but it has also greenlit $1.4 billion for what it calls “high-return growth” projects.

Projects under this banner include the Oyu Tolgoi copper-gold underground development in Mongolia, the Amrun bauxite project in Queensland and AutoHaul™, the company’s automated train haulage system in the Pilbara of Western Australia.

In addition to this, the company has agreed to provide $146 million to undertake initial work at its Koodaideri iron ore project in Western Australia, ahead of a final investment decision by the end of the year.

These funds will go towards detailed engineering work on key elements of Koodaideri, development of a rail construction camp and the first stage of an accommodation camp. Rio calls Koodaideri its first “intelligent mine” which, should it receive board and government approvals, will incorporate the “latest in high-tech advances in the industry” using increased levels of automation and robotics.

The prefeasibility study on Koodaideri included a 40 million tonne per year capacity dry crushing and screening plant, non-process infrastructure, product stockyards, rail loop and load-out and a 170 km AutoHaul rail link to the main line. This came with a capital cost of some $2.2 billion and potential for construction to commence in 2019, followed by first production in 2021. Phase two of Koodaideri could potentially take the operation to beyond 70 Mt/y.

In an update in June, the company said the Koodaideri feasibility study would use “data centric and advanced digital engineering to produce a digital twin of the asset”, while there was over 100 “innovation opportunities” within the FS.

The project is expected to deliver replacement tonnes to the company’s Pilbara operations as other mines come to an end of their lives.

In terms of AutoHaul, which the company has approved $940 million of spend on, Rio said around 65% of trains at the end of the June quarter had run in either driver attended or autonomous mode and more than 3.3 million kilometres had now been completed in this mode of operation.

The system, focused on automating trains transporting iron ore to Rio’s port facilities, received accreditation to run trains in autonomous mode from the National Rail Safety Regulator on May 18 and the first loaded autonomous journey took place on July 10. Full implementation of the autonomous programme is expected by the end of 2018.

At the $1.9 billion Amrun bauxite expansion project on the Cape York Peninsula, in north Queensland, development is advancing to plan with first shipment expected in the first half of next year. The stacker and reclaimer have been transported to site following completion of fabrication, while shiploader assembly is also nearing completion.

The Amrun expansion is expected to increase the company’s bauxite shipments by 10 Mt/y.

At the Oyu Tolgoi underground project, contractor numbers are approaching their peak, with a workforce of over 7,500 (89% Mongolian nationals) at the end of June.

Shaft two equipping and headframe fit-out as part of the $5.3 billion project is in progress, and the shaft five ventilation system has been fully commissioned and is now operational. Construction of the first drawbell at the block cave development is still expected in mid-2020.

When the underground is fully ramped up in 2027, Oyu Tolgoi is expected to produce more than 500,000 tonnes of copper a year.

Lastly, development of the A21 project at the Diavik diamond mine in Canada, which Rio owns 60% of, is ahead of schedule with first ore uncovered in March and the mine expected to be at full  capacity during the December quarter of 2018.

A21 is expected to sustain the mine’s production levels at 6-7 million carats and extend the life beyond 2023.

Rio signs up three Chinese EPC contractors for Oyu Tolgoi power plan

Rio Tinto has entered into agreements with three Chinese EPC contractors that could potentially solve the company’s domestic power challenge at its majority-owned Oyu Tolgoi copper-gold operation in Mongolia.

The three state-owned contractors – China Machinery Engineering Corp, Harbin Electric International Co Ltd and Power Construction Corp of China – have been asked to submit a bid for the engineering, design and construction of a power station.

“The agreement entered into with each bidder provides that, where a bidder submits a conforming bid and it is not accepted by Oyu Tolgoi LLC, Oyu Tolgoi LLC will pay $500,000 to that bidder to offset the costs of preparing that bid and the early engineering and design work packs,” Rio, which has a 33.5% indirect ownership interest in the limited company, said.

In its June quarter results, released earlier this week, Rio said Oyu Tolgoi LLC was “progressing studies and preparations for suitable power solutions and continues to discuss the provision of domestic power with the Government of Mongolia”.

Earlier in the year, the Southern Region Power Sector Co-operation Agreement, under which Oyu Tolgoi was committed to working with the Government of Mongolia on a Tavan Tolgoi Independent Power Provider project, was cancelled.

The government gave the company four years, from February 2018, to find a domestic power supply for the operation.