(Alliance News) - Anglo-Australian miner Rio Tinto PLC on Tuesday said it has submitted plans for a coal-fired power plant for the Oyu Tolgoi mine in Mongolia.
Rio Tinto has until June 2023 to secure domestically-sourced power for the mine, it said, following agreements signed with the government in 2009 and 2018.
It has now submitted a feasibility study for the Tavan Tolgoi power plant, which would have a capacity of 300 megawatts and be fuelled by coal. The plant would cost around USD924 million, which is included in Rio Tinto's capital expenditure guidance for 2020, 2021, and 2022.
Rio Tinto did say it was also looking at securing other domestic power sources, including renewable energy.
Arnaud Soirat, the head of Copper & Diamonds at Rio Tinto, 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."
Oyu Tolgoi, located in the South Gobi region of Mongolia, is one of the largest-known copper and gold deposits in the world. It is 550 kilometres south of the capital Ulaanbaatar and is not far from the Chinese border.
The government of Mongolia has a 34% stake in the mine, which Rio Tinto has managed since 2010.
Rio Tinto has run into several problems at the mine. In July last year, first production was delayed for between 16 to 30 months after "stability risks" were discovered in the original approved mining plan. A new one is set to be completed in the first half of 2020.
Rio Tinto increased spending guidance on the project by USD1.2 billion to USD1.9 billion as a result, meaning it expects to spend some USD6.5 billion to USD7.2 billion on the site.
By George Collard; georgecollard@alliancenews.com
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