The Asia Miner

JAN-FEB 2018

The ASIA Miner - Reporting Important Issues to Mining Companies in the Asia Pacific Region

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Page 14 of 83

Volume 15 • Issue 1 | 2018 | ASIA Miner | 13 AS Turquoise Hill Resources gears up to begin underground production from the Oyu Tolgoi (OT) Copper-Gold Project in 2020, it expects the open pit operations to more than double gold production during 2018. The Rio Tinto controlled company has fore- cast production of 240,000 to 280,000 ounces with operating costs dropping by about 2.8%. This guidance has more than doubled from 100,000 to 140,000 ounces expected to be produced during 2017. The open pit is expected to produce 125,000 to 155,000 tonnes of copper in concentrate in 2018, slightly less than the 130,000 to 160,000 tonnes predicted for 2017. The open pit is expected to mine in Phase 6 in early 2018 and in Phase 4 throughout the year while stockpiled ore is also expect- ed to be processed. The increased gold production relative to the 2016 Technical Report is due to splitting Phase 4 into two parts and bringing produc- tion forward from future years. Operating cash costs for 2018 are ex- pected to be about $700 million, down from the $720 anticipated for 2017 as a result of lower concentrator and logistics costs. Capital expenditures for 2018 on a cash-basis are expected to be approxi- mately $150 million for open-pit operations and $1.1 billion to $1.2 billion for under- ground development. SIEMENS is undertaking the engineering, design, production and supply of the electrical equipment for the conveyor system at Oyu Tolgoi Copper-Gold Project. The delivery will comprise the new con- veyor system with gearless and conventional drives from thyssenk- rupp Industrial Solutions. The new system will extend the existing open cast mining facility and is expected to bring 95,000 tonnes of copper ore to the sur- face from the underground operations per day. Initial underground production is expected to commence in 2020. The conveyor system has to overcome a difference in height of al- most 1400 metres and the order value is in the tens of millions of Euros. Siemens is supplying thyssenkrupp with state-of-the-art electrical equipment consisting of 8DA10 (gas-insulated) and NX-AIR (air-in- sulated) medium-voltage switchgear, transformers, low-voltage en- ergy distribution, Sinamics SL 150 and Sinamics S150 frequency converters as well as low-speed synchronous motors with a nom- inal power of 5.5 megawatts and smaller squirrel cage induction motors. The delivery also includes pre-assembled 'E-Houses' for installing the equipment as well as power factor correction and harmonic filtering equipment. To fulfil the requirements of the underground environment the dimensions of the E-Houses were reduced to an absolute minimum. The transport system consists of a total of nine conveyors – seven underground and two at surface. Four of these conveyor belts have a gearless design, each with two 5.5 megawatts drive systems. As a leading global provider, thyssenkrupp Industrial Solutions specialises in planning and supplying advanced mining and con- veying systems. By using Siemens technology, the industrial group has already achieved one of the longest and most powerful conveying systems in the world. Siemens has been supplying thyssenkrupp with innovative, re- liable and powerful drive systems and electrical equipment for in- ternational mining projects for more than six years. This close and successful collaboration has allowed Siemens to win the copper mine project in Mongolia. The mine is about 550km south of the capital city of Ulaanbaatar and is in the province of Umnugovi in the Southern Gobi region of Mongolia. The Oyu Tolgoi mine complex is a joint venture between the Mongolian government and Turquoise Hill Resources with Rio Tinto as the majority owner of Turquoise Hill Resources. Siemens to power OT conveyors The concentrator facilities at Oyu Tolgoi in Mongolia's South Gobi region. OT gold production to double in 2018 Open-pit capital mainly comprises de- ferred stripping, equipment purchases, tail- ings storage facility construction and main- tenance components. The main drivers of the 2018 estimate increase are equipment purchases and maintenance. Underground development capital in- cludes expansion capital and VAT. Based on the 2016 report, lateral development is expected to advance about 10km in 2018. During the September quarter, operation- al records were achieved for total material mined, ore treated and average daily con- centrator throughput. Material mined was 27.466 million tonnes, an increase of 9% over the June quarter and ore treated in- creased 10.1% to 10.615 million tonnes. Average daily concentrator throughput was 115,400 tonnes, an increase of 8.9%, al- though average throughput was impacted by a scheduled maintenance shutdown. Turquoise Hill continues to expect the first draw bell in mid-2020 and expects sustainable first production in 2021. OT is jointly owned by the government of Mon- golia (34%) and Turquoise Hill (66%). Rio owns 51% of Turquoise Hill.

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