Turquoise Hill announces the submission of the Feasibility Study for the Tavan Tolgoi Power Plant Project
EconomyUlaanbaatar/MONTSAME/. Turquoise Hill Resources on February 17 announced the submission of the Feasibility Study for the Tavan Tolgoi Power Plant (TTPP) Project to the Government of Mongolia by Oyu Tolgoi LLC.
Oyu Tolgoi LLC is obliged under the 2009 Oyu Tolgoi Investment Agreement (Investment Agreement) to secure a long-term domestic source of power for the Oyu Tolgoi mine. The Power Source Framework Agreement (PSFA) entered into between Oyu Tolgoi LLC and the Government of Mongolia on December 31, 2018 provides a binding framework and pathway for the construction of a Tavan Tolgoi-based power solution for the Oyu Tolgoi mine by June 30, 2023. The power plant would be majority-owned by Oyu Tolgoi LLC and situated close to the Tavan Tolgoi coal mining district located approximately 150 kilometres from the Oyu Tolgoi mine.
Oyu Tolgoi is currently sourcing power from China’s Inner Mongolian Western Grid via overhead power lines, via a back-to-back power purchase agreement with National Power Transmission Grid JSC (NPTG), the power importing entity, and the Inner Mongolian Power Company (IMPC).
The Tavan Tolgoi Power Plant (TTPP) Feasibility Study is
based on a 300 MW coal fired power plant to be located in Tsogttsetsii soum of
Umnugovi province, with a total project cost estimate of up to $924 million,
pending consideration of certain amounts yet to be finalized such as government
fees, licenses and certain reimbursements per the Tavan Tolgoi Investment
Agreement.
It is anticipated that back-up power requirements will be
provided by IMPC until such time as they can be provided within Mongolia. The
project aligns with the Parliament Resolution No.73 (2018) and the government
policies to develop a power plant at the Tavan Tolgoi coal fields.
Oyu Tolgoi LLC has made significant progress to develop a
cost competitive and optimal solution for TTPP with a fully negotiated EPC
contract that is now ready for signature. The current schedule targets two
units of the TTPP to be operational by June 2024.
The existing PSFA specifies target dates for milestones to
be achieved through mutual cooperation between Oyu Tolgoi LLC and the
Government of Mongolia, several of which have now passed. In accordance with
the Contingency Arrangements clause 7 4 a ii of the PSFA, Oyu Tolgoi LLC has
given notice and is currently seeking a mutually acceptable alternative basis
on which to proceed with securing long term domestic power supply for Oyu
Tolgoi.
“Certainty of safe, reliable and stable long term power
supply is fundamental to the development of an underground mining project like
Oyu Tolgoi,” stated Ulf Quellmann, Chief Executive Officer of Turquoise Hill.
“We will continue to work with the Government of Mongolia
and Rio Tinto on behalf of all stakeholders to determine the preferred power
solution for Oyu Tolgoi.”
Source: www.turquoisehill.com