Continued its globally competitive safety performance
Maintained its highest water use efficiency per tonne of ore production
Reached record-high national and Umnugovi procurement spend in 2021, stretching to US$606 million and US$216 million, respectively
Paid US$681 million in taxes, fees and other payments
In-country spend reached US$13.4 billion
Completed construction of Material Handling System 1 of the Underground mine
Awarded the Best Entrepreneur and Domestic Supplier Supporting Entrepreneur awards

Oyu Tolgoi released its latest performance scorecard, highlighting key performance metrics for the fourth quarter of 2021, providing an update on the underground development and its ongoing COVID-19 control measures.

In 2021, Oyu Tolgoi continued to progress and deliver important milestones related to the underground mine development. This is in addition to its significant contribution to the Mongolian economy while effectively managing challenges associated with the COVID-19 pandemic. Oyu Tolgoi has contributed US$13.4 billion of in-country spend between 2010 and 2021 and paid US$681 million in taxes, fees and other payments in 2021.

The Mongolian National Chamber of Commerce and Industry announced the outstanding companies, organisations and entrepreneurs that contribute to the social and economic development of Mongolia during the annual Entrepreneur-2021 Mercury award ceremony. Oyu Tolgoi was selected as The Best Entrepreneur and Domestic Supplier Supporting Entrepreneur. We have spent US$4.1 billion on national procurement since 2010, and about 74% of our in-country spend was on domestic procurement with Mongolian suppliers at the end of 2021.

Chief executive officer of Oyu Tolgoi, Armando Torres, said, “Oyu Tolgoi delivered strong results in 2021, building on a solid safety, environmental, and operational performance. We have also advanced the underground mine development, completing the Material Handling System 1, and reached our copper and gold production guidance. All these results were achieved while managing the challenging market conditions and COVID-19 pandemic. Oyu Tolgoi is proud to deliver these achievements together with our employees, communities, contractors, suppliers and shareholders. The next major task that we all have in front of us, is the commencement of the undercut. We will commence caving operations as soon as the required criteria are achieved so that we will be able to deliver the full benefits of Oyu Tolgoi to our shareholders, including the people of Mongolia.”

Safety is our first priority and strict measures are in place to protect our people. In the fourth quarter, stringent Chinese border restrictions continued due to increased cases of COVID-19 in Mongolia. We continue to work closely with the Mongolian and Chinese authorities and our customers to manage the risk of supply chain disruptions. Cross-border concentrate shipments into China have resumed with some measures in place to transport greater volumes in a safe and efficient manner, however uncertainty continues to exist with the rate of COVID-19 cases in Mongolia. The force majeure declared on shipments from 30 March remains in place.

Operational Update

Prioritised the safety and achieved an All Injury Frequency Rate (AIFR) of 0.14 per 200,000 people/hours worked.
Maintained excellent water-conservation practices, achieving the highest water use efficiency rates per tonne of ore production, using 0.4 cubic meters of raw water per tonne of ore processed - three times less than similar operations worldwide. Achieved an average water-recycling rate of 88.29%, compared to a target of 80%.
Ninety six per cent of Oyu Tolgoi’s workforce are Mongolian citizens.
Paid US$681 million in the form of taxes, fees and other payments to the Government of Mongolia in 2021. Since 2010, Oyu Tolgoi has paid US$3.6 billion in taxes, fees and other payments, including VAT to Mongolian suppliers.
Partnered with 864 suppliers at the end of 2021, including 540 national businesses, accounting for 71% of the total operations procurement spend.
Q4 2021 Performance Scorecard can be viewed here.

Production Update

Mined copper production from the open pit was 9% higher than 2020 with improved performance, temporary increase in grades, and increased mill feed following geotechnical issues in the first half, partly offset by lower staffing levels due to COVID-19.
Oyu Tolgoi Production Data

All data represents full production and sales on a 100% basis
Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Full year 2020 Full year 2021
Open pit material mined (‘000 tonnes) 23,663 22,588 15,829 22,588 23,979 97,694
84,983
Ore treated (‘000 tonnes) 9,594 9,813 9,401 9,336 10,573 40,200 39,124

Average mill head grades:

Copper (%) 0.50 0.56 0.47 0.53 0.46 0.46 0.50
Gold (g/t) 0.41 0.68 0.50 0.63 0.38 0.24 0.54
Silver (g/t) 1.16 1.29 1.19 1.29 1.27 1.18 1.26

Concentrates produced (‘000 tonnes) 190.2 201.9 173.2 191.9 182.7 693.1 749.6
Average concentrate grade (% Cu) 21.9 22.5 21.2 21.9 21.3 21.6 21.7

Production of metals in concentrates:

Copper in concentrates (‘000 tonnes) 41.6 45.4 36.7 41.9 38.9 149.6 163

Gold in concentrates (‘000 ounces) 88 146 113 131 79 182 468

Silver in concentrates (‘000 ounces) 231 255 235 249 238 876 977
Concentrate sold (‘000 tonnes) 181.5 186.3 92.6 224.4 165.9 669.6 669.2

Sales of metals in concentrates:
Copper (‘000 tonnes) 37.9 39.0 19.6 46.4 34.4 137.8 139.4
Gold (‘000 ounces) 66 111 73 149 102 150 435
Silver (‘000 ounces) 194 207 106 278 192 760 783

Metal recovery (%)
Copper 85.9 86.3 79.7 83.9 80.1 79.6 82.8
Gold 68.8 72.2 69.3 68.7 59.3 58.6 68.4
Silver 64.3 65.3 62.5 64.1 55.1 56.4 61.6

Underground Development Update [1]

Technical progress

The project is technically and operationally ready for undercut commencement, despite continued COVID-19 constraints. Site accommodation and staffing levels improved in the quarter to between 60% and 70% of planned requirements. The impact on project costs of the additional restrictions related to COVID-19 to the end of December 2021 is estimated to be $175 million. The project has achieved the conveyor to surface decline breakthrough and completed construction of Materials Handling System 1 with commissioning expected to be completed in the coming weeks.
Shaft 4 sinking activities recommenced in October, with advancement now at 148 metres below ground level. Shaft 3 readiness works continue, with sinking commencement expected by the end of the first quarter of 2022, despite some disruptions following an unplanned failure on one of the sinking brake systems. The delay to the commissioning of shafts 3 and 4 is still expected to be approximately nine months per prior guidance based on known COVID-19 impacts to date. Panel 1 and 2 studies will be ongoing throughout 2022.
Other Updates


As Rio Tinto reported shareholders negotiations are constructive and making positive progress. All key stakeholders have stated that they remain committed to moving the project forward and reaching a long-term solution to the items under discussion.
In December, the updated Resources and Reserves were registered in accordance with regulations and approval of the 2022 Annual Mine Plan was received. The updated Feasibility Study (OTFS20) has been submitted to the relevant governmental agencies of Mongolia.
As a result of COVID-19 impacts and outstanding non-technical undercut criteria, first sustainable production will be no earlier than January 2023, subject to the timing of commencement of the undercut. The full impact on the cost of the integrated project is subject to further analysis once we have clarity on the timeline around the completion of the undercut criteria and ongoing COVID-19 restrictions.
Other milestones that need to be met in order to ensure that the project can commence caving operations (undercut) include: approval of the project investment uplift to $6.75 billion, approval of the funding plan and extension of the current power supply arrangements until an agreed long term stable and reliable power solution can be fully implemented.
[1] Project baseline reporting has been updated following endorsement of the definitive estimate by Rio Tinto Board and Turquoise Hill Resources (pending Oyu Tolgoi board approval).

The definitive estimate assumed COVID-19 restrictions in 2021 that were no more stringent than those experienced in September 2020 and noted that should COVID-19 constraints continue beyond 2021 or should the COVID-19 situation escalate further in 2021 leading to tougher restrictions, additional costs and schedule impacts would arise. Since the definitive estimate, at the end of 2020, Mongolia implemented additional restrictions in response to community transmission cases, and in March 2021 the first cases of COVID-19 were identified at Oyu Tolgoi resulting in temporary site shutdown, quarantine measures and further travel and movement restrictions. The impact of these additional restrictions, which have continued throughout this period and are beyond those experienced in September 2020, is ongoing. To date, the impact on projects costs of the additional restrictions experienced to the end of December 2021 is estimated to be $175 million. Additional costs and schedule impacts continue to be incurred and the final impact is still to be determined.


About Oyu Tolgoi LLC (www.ot.mn)

Oyu Tolgoi LLC, Mongolia's largest copper and gold mining company, is a strategic partnership between the Government of Mongolia, Turquoise Hill Resources and Rio Tinto. Located in the South Gobi, Oyu Tolgoi commenced shipment of product to customers in July 2013. Oyu Tolgoi is managed by Rio Tinto, which is investing global expertise and cutting-edge technology to help develop Mongolia’s mining industry and ensure Oyu Tolgoi is one of the world’s most advanced mines. For Oyu Tolgoi, nothing matters more than safety. The business operates under the principle that if a job cannot be done safely, it will not be done at all.