Continued globally competitive safety performance
Maintained the highest water use efficiency per tonne of ore production compared to similar global operations
Paid US$91 million in taxes, fees and other payments in the Q2 2022
Total in-country spend reached US$14.2 billion
Fired the first and second draw bell of the Underground mine
Approved US$50 million funding to develop Khanbogd

Ulaanbaatar, Mongolia – Oyu Tolgoi released its latest performance scorecard, highlighting key performance metrics for the second quarter of 2022 and providing an update on the underground development.

The firing of the first draw bell of our underground mine successfully took place on 17 June 2022 and the second drawbell on 1 July 2022. This is ahistoric moment for our shareholders, our operation, and for the people of Mongolia to continue receiving its benefits for decades to come. The underground remains on track to reach Sustainable Production from Panel 0 in the first half of 2023.

Oyu Tolgoi CEO Deirdré Lingenfelder said, “The first draw bell blasting confirmed our commitment to seeing the Underground project succeed and reaching the first sustainable production in the first half of 2023. I was privileged to be part of such a special occasion and incredibly proud of the Oyu Tolgoi teams and all other stakeholders that have worked tirelessly to get to this point. Besides our operational milestones, we have been continuously growing together with our partners, putting environmental and social issues at the heart of our strategy. Last May, we handed over the “Khanbogd Soum Development Plan 2040” long-term strategic document. For this purpose, Oyu Tolgoi Board approved a $50 million five-year funding programme to support the long-term, sustainable development of Khanbogd soum. Everything is possible through strong partnership.”


Operational Update

Prioritised safety above all else and achieved an All Injury Frequency Rate (AIFR) of 0.21 per 200,000 people/hours worked.
Maintained excellent water-conservation practices, using 0.39 cubic meters of raw water per tonne of ore processed - three times less than similar operations worldwide. Achieved an average water-recycling rate of 87.16%, compared to a target of 80%.
96.7% of Oyu Tolgoi’s workforce are Mongolian citizens.
Paid US$91 million in the form of taxes, fees and other payments to the Government of Mongolia. Since 2010, Oyu Tolgoi has paid US$3.74 billion in taxes, fees and other payments, including VAT to Mongolian suppliers.
Partnered with 722 suppliers at the end of Q2 2022, including 490 national businesses, accounting for 75% of the total operations procurement spend.
Q2 2022 Performance Scorecard can be viewed here.
Year in Review – 2021 can be viewed here.

Production Update

Mined copper production from the open pit was 17% lower than the second quarter of 2021 due to lower copper grades and recoveries as a result of planned mine sequencing and feed from low grade stockpiles. Gold grades were significantly lower than the prior year (0.26% vs 0.50% in 2021).
The force majeure declared on shipments from 30 March 2021 has been lifted.
Oyu Tolgoi Production Data

All data represents full production and sales on a 100% basis
Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 H1 2022 H1 2021 Full year 2021
Open pit material mined (‘000 tonnes)
15,829 22,588 23,979 24,386 25,550 49,936 38,417 84,983

Ore treated (‘000 tonnes) 9,401 9,336 10,573 9,581 9,685 19,266 19,214 39,124

Average mill head grades:
Copper (%) 0.47 0.53 0.46 0.40 0.40 0.40 0.51 0.50
Gold (g/t) 0.50 0.63 0.38 0.32 0.26 0.29 0.59 0.54
Silver (g/t) 1.19 1.29 1.27 1.25 1.15 1.20 1.24 1.26

Concentrates produced (‘000 tonnes) 173.2 191.9 182.7 144.3 146.0 290.3 375.1
749.6
Average concentrate grade (% Cu) 21.2 21.9 21.3 21.0 20.9 21.0 21.9 21.7

Production of metals in concentrates:
Copper in concentrates (‘000 tonnes) 36.7 41.9 38.9 30.3 30.6 60.8 82.2 163

Gold in concentrates (‘000 ounces) 113 131 79 59 48 107 259 468

Silver in concentrates (‘000 ounces) 235 249 238 211 201 412 490 977

Concentrate sold (‘000 tonnes) 92.6 224.4 165.9 148.3 175.3 323.6 278.9 669.2

Sales of metals in concentrates:
Copper (‘000 tonnes) 19.6 46.4 34.4 29.9 35.3 65.2 58.6 139.4
Gold (‘000 ounces) 73 149 102 57 68 125 183 435
Silver (‘000 ounces) 106 278 192 179 224 403 313 783

Metal recovery (%)
Copper 79.7 83.9 80.1 78.1 81.4 79.8 83.4 82.8
Gold 69.3 68.7 59.3 59.0 59.1 59.3 71.0 68.4
Silver 62.5 64.1 55.1 54.3 57.8 56.0 64.0 61.6

Underground Development Update[1]

Technical progress

A cost and schedule reforecast was completed in June 2022 resulting in a total project cost estimate of $7.06 billion, which remains under review by the Oyu Tolgoi Board. This is an increase of $0.3 billion against the 2020 Definitive Estimate, which is largely related to COVID-19 disruptions. The 2022 reforecast assumes there are no further COVID-19 disruptions from June 2022.
The first drawbell of the Hugo North underground mine was fired in June. The undercut progression remains on track to achieve first sustainable production from Panel 0 in the first half of 2023.
Shafts 3 and 4 have been delayed due to COVID-19 restrictions and reprioritisation of the mobilised workforce, as previously reported. However progress has been made in the quarter and the shafts are now at depths of 174 metres and 276 metres, respectively. Both shafts are now expected to be commissioned in the first half of 2024, 15 months later than the 2020 Definitive Estimate (previously nine months delay).
Study work for Panels 1 and 2 (which are required to support the ramp-up to 95,000 tonnes of ore per day) is expected to be completed in the first half of 2023 and will incorporate any ventilation impacts due to the shaft 3 and 4 delays.

[1] The submission of Oyu Tolgoi LLC’s updated Mongolian Feasibility Study remains under discussion with the Ministry of Mining, the Minerals Council and the Technical Working Group appointed by the Ministry of Mining.

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.

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https://www.ot.mn/oyu-tolgoi-releases-q2-2022-performance-results/