Oyu Tolgoi announces Q4 2021 performance results

• Continued its globally competitive safety performance
• Maintained its highest water use efficiency per tonne of ore production
• Reached record-high national and Umnugovi procurement spend in 2021, stretching to US$606 million and US$216 million, respectively
• Paid US$681 million in taxes, fees and other payments
• In-country spend reached US$13.4 billion
• Completed construction of Material Handling System 1 of the Underground mine
• Awarded the Best Entrepreneur and Domestic Supplier Supporting Entrepreneur awards

Oyu Tolgoi released its latest performance scorecard, highlighting key performance metrics for the fourth quarter of 2021, providing an update on the underground development and its ongoing COVID-19 control measures.

In 2021, Oyu Tolgoi continued to progress and deliver important milestones related to the underground mine development. This is in addition to its significant contribution to the Mongolian economy while effectively managing challenges associated with the COVID-19 pandemic. Oyu Tolgoi has contributed US$13.4 billion of in-country spend between 2010 and 2021 and paid US$681 million in taxes, fees and other payments in 2021.

The Mongolian National Chamber of Commerce and Industry announced the outstanding companies, organisations and entrepreneurs that contribute to the social and economic development of Mongolia during the annual Entrepreneur-2021 Mercury award ceremony. Oyu Tolgoi was selected as The Best Entrepreneur and Domestic Supplier Supporting Entrepreneur. We have spent US$4.1 billion on national procurement since 2010, and about 74% of our in-country spend was on domestic procurement with Mongolian suppliers at the end of 2021.

Chief executive officer of Oyu Tolgoi, Armando Torres, said, “Oyu Tolgoi delivered strong results in 2021, building on a solid safety, environmental, and operational performance. We have also advanced the underground mine development, completing the Material Handling System 1, and reached our copper and gold production guidance. All these results were achieved while managing the challenging market conditions and COVID-19 pandemic. Oyu Tolgoi is proud to deliver these achievements together with our employees, communities, contractors, suppliers and shareholders. The next major task that we all have in front of us, is the commencement of the undercut. We will commence caving operations as soon as the required criteria are achieved so that we will be able to deliver the full benefits of Oyu Tolgoi to our shareholders, including the people of Mongolia.”

Safety is our first priority and strict measures are in place to protect our people. In the fourth quarter, stringent Chinese border restrictions continued due to increased cases of COVID-19 in Mongolia. We continue to work closely with the Mongolian and Chinese authorities and our customers to manage the risk of supply chain disruptions. Cross-border concentrate shipments into China have resumed with some measures in place to transport greater volumes in a safe and efficient manner, however uncertainty continues to exist with the rate of COVID-19 cases in Mongolia. The force majeure declared on shipments from 30 March remains in place.

Operational Update

• Prioritised the safety and achieved an All Injury Frequency Rate (AIFR) of 0.14 per 200,000 people/hours worked.
• Maintained excellent water-conservation practices, achieving the highest water use efficiency rates per tonne of ore production, using 0.4 cubic meters of raw water per tonne of ore processed – three times less than similar operations worldwide. Achieved an average water-recycling rate of 88.29%, compared to a target of 80%.
• Ninety six per cent of Oyu Tolgoi’s workforce are Mongolian citizens.
• Paid US$681 million in the form of taxes, fees and other payments to the Government of Mongolia in 2021. Since 2010, Oyu Tolgoi has paid US$3.6 billion in taxes, fees and other payments, including VAT to Mongolian suppliers.
• Partnered with 864 suppliers at the end of 2021, including 540 national businesses, accounting for 71% of the total operations procurement spend.
• Q4 2021 Performance Scorecard can be viewed here.

Production Update

• Mined copper production from the open pit was 9% higher than 2020 with improved performance, temporary increase in grades, and increased mill feed following geotechnical issues in the first half, partly offset by lower staffing levels due to COVID-19.

Oyu Tolgoi Production Data

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

Underground Development Update [1]