Rio Tinto’s largest project, the Oyu Tolgoi copper and gold mine in Mongolia, has been delayed by negotiations between the government and the company that are getting approximately nowhere. Turquoise Hill owns leases adjacent to the copper and gold property and leases on a nearby coal mine through its SouthGobi Resources subsidiary. Turquoise Hill, formerly known as Ivanhoe Mines, essentially discovered the resource after acquiring the exploration rights from BHP Billiton PLC (NYSE: BHP) in 2000. Rio Tinto bought in in 2006.
Oyu Tolgoi produced 76,700 metric tons of copper in 2013 and 157,000 ounces of gold. Copper production is expected to double in 2014, and gold production could rise by between four and five times to as much as 750,000 ounces. The resource is estimated to have a life of at least 40 years, with 10-year average annual production of 332,000 metric tons of copper, 495,000 ounces of gold and 2.3 million ounces of silver.
Turquoise Hill shares were down about 1.7% in early afternoon trading on Friday, at $4.08 in a 52-week range of $2.26 to $4.62. The high was posted in May 2013, following first deliveries from Oyu Tolgoi.
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