Shares in Rio Tinto-controlled Turquoise Hill Resources (TSE,NYSE:TRQ) surged on Monday after Mongolia approved the expansion of the Vancouver-based company’s massive copper-gold mine in the Asian country.
By mid-day Monday Turquoise Hill had gained 7.4% in massive volumes affording the company a $7 billion market value on the New York Stock Exchange. Turquoise Hill owns 66% of the massive project in the Gobi Desert and the Mongolian government the rest.
Mongolian Prime Minister Chimediin Saikhanbileg announced on Sunday that his Cabinet has decided to proceed with the nearly $6 billion second phase at Oyu Tolgoi after two years of often bitter negotiations between the government and the Anglo-Australian giant.
Saikhanbileg said in televised address to the country with a population of around 3 million that the project, which could contribute as much as a third of the economy when in full production, was in the national interest reports AFP.
The two camps have been at loggerheads over funding for the underground expansion – where 80% of the resource is located – and during the protracted battle $4.5bn funding commitments led by the World Bank expired and a $100m-plus tax dispute was raised and settled. Construction was halted in October 2013 and resulted in nearly 2,000 layoffs at the mine.
Turquoise Hill mined 589,000oz of gold and 148,000t of copper in concentrates last year and expects to produce 600,000oz – 700,000oz of gold and 175,000t to 195,000t of copper in concentrates in 2015. The mine also produces small quantitates of silver.
Image of traditional Naadam festivities at Oyu Tolgoi in 2012 courtesy of the company.
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Lähde: Turquoise Hill surges after Oyu Tolgoi expansion okayed
