Rio Tinto confirms $5.3bn expansion of Mongolian mine
Rio Tinto is pressing ahead with the expansion of the Mongolian Oyu Tolgoi copper mine. The move will see the Oyu Tolgoi output increase to 500,000 tonnes annually over the course of the next 10 years, further cementing its place as one of the largest copper mines in the world.
The mining company confirmed the $5.3bn expansion in a time of uncertainty, but along with other leading mining companies, there is an expectation for copper prices to rise following the current recorded low.
Jean-Sebastian Jaques, who has recently been announced as the successor to current chief executive of Rio Tinto Sam Walsh, believes that now is the time to expand in the current market.
“Long-term copper fundamentals remain strong and production from the Oyu Tolgoi underground will commence at a time when copper markets are expected to face a structural deficit,” he said.
This belief however, is not shared by Myles Allsop, analyst at UBS. Mr Allsop warns that following disputes with Mongolian authorities the current plans for expansion present a high risk.
Source: Financial Times
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