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Oyu Tolgoi achieves record production performance in 2016

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The recently released fourth quarter and annual production results report of Oyu Tolgoi LLC shows that the company’s open pit mining and concentrator operations in 2016 achieved record levels for material mined and ore treated, and exceeded both copper and gold production guidance for the year. Concentrator performance during the fourth quarter was strong with the highest throughput since production began.

Jeff Tygesen, CEO of Turquoise Hill Resources, has said the company performed “very well” in 2016 and is well-positioned to sustain in 2017 grade challenges. It is expected to produce 130,000 to 160,000 tonnes of copper in concentrates and 100,000 to 140,000 ounces of gold in concentrates in 2017. OT is a world-class and Mongolia’s largest copper and gold mining company, and is jointly owned by the Government of Mongolia, Turquoise Hill Resources and Rio Tinto.

Expressing his appreciation of the Oyu Tolgoi team’s “strong performance over 2016 despite significant operational and market challenges”, Armando Torres, Managing Director, said the company’s safety performance continues to be one of the best in Rio Tinto, and “across our global mining peers”.  

The concentrating plant’s performance in Q4 showed a 7.4% improvement over that in Q3 and  it treated an average of 106,700 tonnes of ore per day. Altogether, 96.9 million tonnes of material was mined in 2016, and 846,600 tonnes of concentrate produced by   treating 38 million tonnes of ore in the processing plant. The concentrate had a metal content of 201,000 tonnes of copper, 300,000 ounces of gold and 1.4 million ounces of silver. 

The total 828,600 tonnes of concentrate sold included 188,900 tonnes of copper, 347,000 ounces of gold, and 1.28 million ounces of silver. Its average copper content was 23.8% in the full year 2016 but 22% in Q4, which is the lowest grade since start of production. 

Recovery figures were relatively bad, mainly because of high pyrite ore and ore grade lowering. In the full year, the recovery percentage of copper was 81, of gold 68.5, and of silver 63.1. The corresponding figures in Q4 were 76.6, 63.4 and 57.2 respectively.

During Q4’16, progress continued in key areas of underground development with the number of Mongolian workers crossing 2,000; Shafts 2 and 5 related activities and construction of critical on-site facilities continued, and the bulk excavation component for the conveyor-to-surface work stream was completed. Lateral development rates are progressing well with a further increase expected in 2017, when additional underground crushing capacity is added. 

The total in-country spend since 2010 crossed $6.1 billion at the end of Q4, including $760 million in 2016.
The company achieved an annual average water recycling rate of 86.2, and used only 0.423 cubic metres of water per tonne of ore processed – one-third the usage of comparable operations worldwide. 

At the end of 2016, 93.5% of the total workforce was Mongolian, with South Gobi residents comprising 22% of this. In other ways also, the company made strong contribution to the South Gobi community in 2016,with procurement spends of $69 million, and investing $9.7 million in sustainable development and community infrastructure projects in the region, including Bayan-Ovoo Primary Health Care Center and the Khanbogd bulk water treatment plant.  
Oyu Tolgoi spent $279 million or 62% of its total procurement expenditures with Mongolian companies in 2016.

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