Oyu Tolgoi commercial production in June
Despite ongoing speculation regarding the investment agreement and project finance at the massive Oyu Tolgoi Copper-Gold Project in southern Mongolia, Turquoise Hill Resources has scheduled first commercial production in June. 
The US$6.2 billion copper-gold complex processed its first ore through the concentrator on January 2 and the first copper-gold concentrate was produced on January 31 this year.
Turquoise Hill is continuing to engage with the Mongolian government and other stakeholders to ensure the implementation of the investment and shareholders’ agreements, after several issues were raised by the government in relation to the project finance and relevant agreements.
The feasibility study for the expansion of operations at Oyu Tolgoi is continuing and is expected to be completed in the first half of 2014 as the company pursues value engineering and optimization.
Meantime, the incoming chief executive officer of joint 66%-shareholder Rio Tinto says he is concerned about the pressure on Mongolia’s state-owned company Erdenes Oyu Tolgoi LLC to increase its share in the complex. Sam Walsh says the idea that the Mongolian government could undermine the original 2009 partnership between the three companies could damage the project’s investment opportunities in the long-term.
The Mongolian government is looking to increase its share which includes a 5% royalty on all sales as the nation faces a revenue squeeze.
“I am concerned by recent political signals in Mongolia calling into question some aspects of the investment agreement. This undermines the partnership we have built and the stability on which a project of this size and scale depends. It puts at risk future investment not only by Rio Tinto but by others considering investing in Mongolia,” Sam Walsh told Reuters.
Source: www.turquoisehill.com
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The GOM is shooting itself and Mongolia in the foot by continually looking back and asking for more rather than looking/ moving forward. This has given Mongolia a very bad reputation in the international community. How much further a head today would Mongolia be if they moved forward rather than looking back. Oyu Tolgoi should have been in production years ago, Tavan Tolgoi and many other mines would by now be or being built. These would have created lots of jobs, taxes and infrastructure for Mongolia and its people and the standard of living for most would have been higher today than it is. If Mongolia is not competitive with other countries the miners will just go elsewhere as they have no choice because the ultimate owners of these companies (the share holders)demand that management invest for the best returns taking economic and political risk consideration into account. Mongolia does not score well on the political risk side and because of the lack of infrastructure and its land locked position also has challenges on the economic side. Look at coal – shipping costs far out way production costs even with some of the best coal deposits in the world overall costs are high.
I totally agree with your comments Marpy. The Mongolians are shooting themselves in the foot and completely missing the point economically. We as investors are looking around the world and seeing developing countries acting like a bunch of bandits. Deals are consummated and later, once development begins, the thievery by these countries begins. This RAPE of the international investing community has reached its limit. Large mining companies will soon begin to withdraw from these thieving, thugs and will concentrate on western deposits where RULE OF LAW applies and is RESPECTED. As an investor, I am completely in dismay over the actions of these ignorant people. I have seen similar issues in Africa, Kazackstan and now Mongolia. ENOUGH I SAY…..