Oyu Tolgoi LLC announces Q2 2018 performance

  • Strong safety performance
  • Major milestone hits at underground development with completion of Shaft 5
  • World class water recycling and re-use performance maintained
  • US$99 million taxes paid over the quarter
  • US$208 million in national procurement spend

Oyu Tolgoi today announced an update on its performance for the quarter ended June 30, 2018.

As of end of second quarter of 2018, Oyu Tolgoi achieved an All Injury Frequency Rate (AIFR) of 0.19 per 200,000 hours worked and was injury-free for 84 out of 91 days for the three months ended June 30, 2018.

Oyu Tolgoi paid approximately US$1.6 billion* in taxes, fees and other payments to the Government of Mongolia between 2010 and the second quarter of 2018 including US$99 million in the first two quarter of 2018.

Oyu Tolgoi’s workforce reached 15,000 making it the largest private employer in Mongolia. At the end of the second quarter, 93 per cent of Oyu Tolgoi’s workforce was Mongolian of which 20.1 per cent were from the Umnugovi province and 52.6 per cent were underground workforce.

Oyu Tolgoi also maintained its world-class environmental performance, with only 0.4 cubic metres of water per tonne of ore processed – a third of the water use compared to similar operations worldwide - and achieving an average water recycling rate of 88 per cent over the period. For more information about water usage and resources click here.

Education and training are major focus areas for Oyu Tolgoi. Delivering our vision to create enduring value, knowledge and skills, Oyu Tolgoi provided 264,822 man hours of training to nearly 9,363 employees and contractors in the second quarter of 2018.

Oyu Tolgoi collaborated with 675 suppliers in the first quarter of 2018, of which 479 are national businesses that account for 79 per cent of total operations procurement spent. Between 2010 and the first quarter of 2018, Oyu Tolgoi spent US$2.5 billion on national procurement of which US$349 million was spent on procurement from Umnugovi suppliers.

The Oyu Tolgoi Performance Scorecard for Q2 2018 is available here.

Q2’18 Production report

Mill throughput increased 6.3 per cent over Q1’18 due to higher utilization rates and the positive impact of high intensity blasting. Copper production in Q2’18 increased 1.5 per cent over Q1’18 as a result of higher mill utilization rates offset by slightly lower grades from the depletion of Phase 6 ore. Gold production increased 19 per cent over Q1’18 due to stronger mill utilization rates, higher grades from Phase 4A and increased recovery. Sales in Q2’18 benefited from improved logistics as inventory accumulated during the Q1’18 force majeure worked its way through the system.

Turquoise Hill expects Oyu Tolgoi to produce 125,000 to 155,000 tonnes of copper and 240,000 to 280,000 ounces of gold in concentrates for 2018. Due to the positive impact of high intensity blasting, mill throughput for 2018 is expected to be approximately 40 million tonnes.

Underground development

Oyu Tolgoi has achieved an important underground development milestone with the commissioning of the completion of Shaft 5, which is 1,178 metres deep and 6.7 metres in diameter. There is expected to be a step-up in underground activities with the increased ventilation capacity from Shaft 5. The Company continues to expect the first draw bell in mid-2020 and sustainable first production in 2021.

Oyu Tolgoi Production Data

All data represents full production and sales on a 100% basis

 

1Q

2017

2Q

2017

3Q

2017

4Q

2017

1Q

2018

2Q 2018

Full Year 
2017

Open pit material mined (‘000 tonnes)

24,333

25,193

27,466

28,929

23,131

22,792

105,921

Ore treated (‘000 tonnes)

10,087

9,637

10,615

10,838

9,561

10,164

41,177

Average mill head grades:

             

Copper (%)

0.51

0.51

0.48

0.53

0.51

0.48

0.51

Gold (g/t)

0.15

0.16

0.18

0.20

0.25

0.26

0.17

Silver (g/t)

1.30

1.38

1.34

1.54

1.32

1.17

1.39

Concentrates produced (‘000 tonnes)

176.0

171.0

170.0

205.4

177.3

178.8

722.5

Average concentrate grade (% Cu)

21.6

21.8

21.7

22.0

21.9

22.0

21.8

Production of metals in concentrates:

             

Copper (‘000 tonnes)

38.1

37.2

36.9

45.3

38.8

39.4

157.4

Gold (‘000 ounces)

25

24

31

35

42

50

114

Silver (‘000 ounces)

215

236

239

285

221

225

974

Concentrate sold (‘000 tonnes)

190.2

182.0

176.6

175.5

163.1

220.0

724.3

Sales of metals in concentrates:

             

Copper (‘000 tonnes)

39.5

37.3

36.9

35.7

34.3

46.1

149.3

Gold (‘000 ounces)

32

23

29

27

31

51

111

Silver (‘000 ounces)

205

222

229

205

206

250

860

Metal recovery (%)

             

Copper

74.9

74.6

73.5

78.0

79.5

79.7

75.4

Gold

48.8

47.7

51.2

50.5

55.0

59.8

49.7

Silver

51.8

53.9

52.8

53.0

54.6

58.4

52.9

Click here to see the full Turquoise Hill announcement.

*- US$1.9 billion after adjusting for the inclusion of VAT paid to Mongolian suppliers and excluding employee withholding taxes and service payments to Mongolian government agencies.

For more information: www.facebook.com/Oyutolgoi; https://twitter.com/OTMongolia; https://ot.mn.