Ulaanbaatar /MONTSAME/. On 24 May, Oyu Tolgoi LLC, Mongolia's largest copper and gold mining company - a strategic partnership between the Government of Mongolia, Turquoise Hill Resources and Rio Tinto, released its latest performance scorecard, highlighting key performance metrics for the first quarter of 2021, providing an update on the underground development, and its ongoing COVID-19 mitigation measures.

Some highlights from the performance scorecard are: 

• Continued its globally competitive safety performance
• Strengthened our COVID-19 response and mitigation measures
• Maintained its highest water use efficiency per tonne of ore production
• In-country spend reaches US$12.3 billion
• Spent US$98 million on national procurement

“The first quarter of 2021 has been challenging due to the COVID-19 global pandemic and increase of community cases in Mongolia. We are constantly adapting to the changing circumstances to prioritize the health and safety of our workforce, suppliers and communities.” the update says. 

A site-wide lockdown was implemented in March for two weeks to mitigate the potential COVID-19 transmission risks on site. Self-isolation controls were quickly mobilized at camp. Currently, site-wide COVID-19 testing is in place and preparations to rollout a vaccination programme are progressing.

Oyu Tolgoi chief executive officer, Armando Torres, said, “We would like to express our gratitude to the Government of Mongolia, all levels of the State Emergency Commission, the Ministry of Health, the Ministry of Mining and Heavy Industry, and all other relevant agencies and frontline personnel working hard to keep us safe during this unprecedented time. I would especially like to thank our employees, communities, contractors, and suppliers for their hard work, perseverance, unwavering commitment and ability to quickly adapt to rapidly evolving situations.”

Despite the challenges, Oyu Tolgoi has maintained its business continuity while protecting its people and communities. COVID-19-related limitations around the movement of goods and people, border crossing restrictions, and enhancing our on-site controls, however, have impacted operations including the underground development, and copper concentrate shipments. First-quarter shipments have been affected by Chinese border restrictions due to increased cases of COVID-19. 

“We declared force majeure on shipments from 30 March and continue to work closely with authorities and our customers to manage the risk of supply chain disruptions. Oyu Tolgoi vaccinated all its copper concentrate shipment drivers and logistics support teams on site, and has a number of controls in place related to disinfecting vehicles and testing to mitigate transmission risk. We partially resumed cross-border concentrate shipments into China on 15 April, however, the situation continues to be fluid with the COVID-19 resurgence in Mongolia.”

Operational Update

• Prioritised the safety and achieved an All Injury Frequency Rate (AIFR) of 0.20 per 200,000 people/hours worked. This still indicates Oyu Tolgoi’s strong safety performance among other operations of Rio Tinto where the average AIFR stood at 0.35 for the same quarter.
• 96 percent of Oyu Tolgoi’s workforce are Mongolian citizens.
• Paid US$417 million in the form of taxes, fees and other payments to the Government of Mongolia in the first quarter of 2021. Since 2010, Oyu Tolgoi has paid US$3.3 billion in taxes, fees and other payments, including VAT to Mongolian suppliers.
• Partnered with 494 suppliers in the first quarter of 2021, including 431 national businesses, accounting for 77 percent of the total operations procurement spend.
• Q1 2021 Performance Scorecard can be viewed here.

Production Update

Mined copper production from the open pit was 29 percent higher than the same quarter of 2020 with the anticipated move to higher grade from the open pit, leading to higher head grade and copper recovery. In the first quarter, pit phasing delivered higher gold production (+457%) compared to the same period in 2020. Access to higher copper and gold grades is expected to continue throughout 2021.

However, the open pit wall failure experienced in the fourth quarter of 2020, combined with the cumulative effects of COVID-19 mitigation measures, have resulted in a downward revision in gold production guidance for 2021, from 500,000 – 550,000 ounces to 400,000 to 480,000 ounces, while the copper guidance range has expanded from 160,000 – 180,000 tonnes to 150,000 – 180,000 tonnes.