Mining giant Rio Tinto will soon begin work on the next stage of its massive Oyu Tolgoi copper and gold mine in Mongolia as it pushes ahead with a $US5.3 billion expansion.
Rio and its partners, the government of Mongolia and Turquoise Hill Resources, have approved the investment for the next stage of the underground mine after being granted necessary permits.
First production from the underground mine is expected in 2020 and the mine is expected to be fully ramped up in 2027.
Rio said Oyu Tolgoi is expected to produce more than 500,000 tonnes of copper a year, up from current annual production of 175,000-200,000 tonnes.
It comes five months after Rio announced 20 financial institutions had agreed to finance the second phase of the $US6.4 billion project, which has been four and a half years in the making.
News that makes sense
Your trusted source for staying up-to-date with the world around you. Get free daily news updates and analysis, straight to your inbox.
Rio Tinto deputy chief executive Jean-Sebastien Jacques said the investment would transform Oyu Tolgoi into one of the most significant copper mines globally, and unlock 80 per cent of its value.
"Long term copper fundamentals remain strong and production from the Oyu Tolgoi underground will commence at a time when copper markets are expected to face a structural deficit," Mr Jacques said.
He said Oyu Tolgoi, which has a workforce of around 3000, offered opportunities for further expansions through existing infrastructure and supply chains.
Turquoise Hill Resources, which is majority owned by Rio Tinto, owns 66 per cent of Oyu Tolgoi while the Mongolian government has a 34 per cent stake in the project.
