Oyu Tolgoi releases Q4 Production Report and 2016 Scorecard

OYU TOLGOI PUBLISHES 2016 SCORECARD; CUMULATIVE IN-COUNTRY SPEND CROSSES US$6.1bn

Oyu Tolgoi today announced an update on its production for the fourth quarter of 2016 and, released the latest edition of its Performance Scorecard.

Oyu Tolgoi performed better than target on safety in 2016, and continuing to be one of the leading safety performers across Rio Tinto and peers in the broader mining industry.

Armando Torres, Managing Director – Oyu Tolgoi, said, “The Oyu Tolgoi team delivered a strong performance over 2016 despite significant operational and market challenges. Our safety performance continues to be one of the best in Rio Tinto – and indeed, across our global mining peers, achieving an All Injury Frequency Rate of 0.22 for the year. Oyu Tolgoi also achieved record setting performance in the open pit operation, and underground development continues to progress well – establishing a strong foundation for the year ahead.”

Oyu Tolgoi’s open pit mining and concentrator operations in 2016 achieved record levels for material mined and ore treated, and exceeded both copper and gold production guidance for the year. Concentrator performance during the fourth quarter was strong with the highest throughput since production began.

During Q4’16, progress continued in key areas of underground development with the national workforce working on the underground project crossing 2,000 personnel; Shafts 2 and 5 related activities and construction of critical on-site facilities continued, and the bulk excavation component for the conveyor-to-surface work stream was completed. Lateral development rates are progressing well with a further increase expected in 2017, when additional underground crushing capacity is added.

Oyu Tolgoi is expected to produce 130,000 to 160,000 tonnes of copper in concentrates and 100,000 to 140,000 ounces of gold in concentrates for 2017.

Q4’16 Scorecard

Oyu Tolgoi’s total in-country spend since 2010 crossed US$6.1 billion at the end of Q4 – demonstrating a strong, continuing commitment to local content in both operations and underground development, including US$760 million total spend in country in 2016.

The company continued its world-class environment performance, achieving an annual average water recycling rate of 86.2 per cent, and using only 0.423 cubic metres of water per tonne of ore processed – one-third the usage of comparable operations worldwide.

At the end of 2016, 93.5 per cent of Oyu Tolgoi’s total workforce was Mongolian, including 96 per cent Mongolian employees at the open pit mining and concentrator operations; and with South Gobi residents comprising 22 per cent of the total workforce.

Oyu Tolgoi continued its strong contribution to the South Gobi community in 2016 achieving procurement spends of US$69 million, and investing US$9.7 million in sustainable development and community infrastructure projects in the region. Two major infrastructure projects saw significant progress in the last quarter, with the Bayan-Ovoo Primary Health Care Center, a two-story building with 10 beds, a surgery and birthing room, and employing 18 staff, including doctors and nurses completed, and the Khanbogd bulk water treatment plant nearing commissioning.

Please click here to see the Scorecard.

Oyu Tolgoi Supplier Forum

Oyu Tolgoi spent 62 per cent of its total procurement expenditures with Mongolian companies in 2016, equalling to US$279 million. With a focus on continuously increasing the Mongolian supplier participation in its supply chain, Oyu Tolgoi will host its 2017 Suppliers Forum on 31 January, 2017 in Ulaanbaatar. The forum is designed to help educate business on working with Oyu Tolgoi, including safety and business integrity principles; and Oyu Tolgoi’s focus on a sustainable in-country supply chain for ‘Life of Mine’ goods and services, covering both operations and underground. For more information, please visit www.ot.mn/suppliers/

Oyu Tolgoi Production Data

All data represents full production and sales on a 100 per cent basis