Finally a positive news on Oyu Tolgoi project. Dispute between Rio Tinto and the government of Mongolia is still ongoing . However, despite the disagreements mainly on feasibility study issues, Oyu Tolgoi LLC is making a necessary effort and preparation to commence copper concentrate shipment on Friday this week, 14th of June. Few formality and documentation matters will be handled prior to commencement of first shipment with Customs Agency of Mongolia.
Many Mongolian and foreign companies and groups participated in a bid for copper concentrate shipment. MCPL (Jia Yo – Chinese and Monnis – Mongolian joint company) was a strong bidder as it currently ships the equipment necessary for OT development. However, Khaan Shorgoolj LLC is said to be the winner of the bid but we failed to confirm it. Initial plan of 72 tn per prime mover is not going to be possible due to the relevant Mongolian laws and regulations. Therefore, every prime mover will carry 44 tn of copper concentrate. However, it is economically better to carry 72 tn for every prime mover, and it is a strategy that the project company is aiming to lobby the relevant ministries.
One of the main concerns from the government is a regional development of Khanbogd area. Local residents are not satisfied with what is being done for the affected areas. Oyu Tolgoi LLC management reports that the development plan is still in process. As of the first half of 2013, Oyu Tolgoi LLC purchased goods and services that is worth 2.3 billion MNT out of expected 37 billion MNT.
Water usage fee is also a concern for both sides. Local citizens are not happy what is Oyu Tolgoi LLC is paying for the water usage. On the other hand, OT LLC reported that it spent 300 million USD for water exploration and usage system. OT LLC will use deep saline aquifer water with 85%-95% of recycle rate. Interestingly, our neighbor China, a country that is infamous for environmental disaster, prohibits the use of deep saline aquifer for industrial and mining purposes.