Oyu Tolgoi LLC has signed a binding power purchase agreement with the Inner Mongolia Power Corporation to supply power to the Oyu Tolgoi mine, according to a press release issued by Turquoise Hill Resources Ltd., on November 5th, 2012. The agreement had been previously delayed for a few times. Although it can be good news for some, it also means that the project will be dependent on China not just for export, but also for the supply of electricity.
Kay Priestly, Chief Executive Officer of Turquoise Hill said, “Finalization of the power purchase agreement will enable Oyu Tolgoi to complete commissioning leading to the first production of copper-gold concentrate. The Governments of Mongolia and China have been instrumental in helping the parties conclude the commercial components of the agreement. With phase-one construction essentially complete, we are on the verge of Oyu Tolgoi becoming a world-class operational mine and delivering long-term benefits to Mongolia.”
As stated in the press release, within the next few weeks Oyu Tolgoi is expected to begin a seven-week commissioning of the ore-processing equipment. First concentrate production will follow within one month and the commencement of commercial production is expected three to five months thereafter.