Ivanhoe CEO: Construction At Oyu Tolgoi 'Ahead Of Schedule'

By Tatyana Shumsky

NEW YORK -(Dow Jones)- Construction of the Oyu Tolgoi copper mine in Mongolia is well ahead of schedule and revenue from byproducts will substantially offset the cost of production, Ivanhoe Mines Ltd. (IVN, IVN.T) Chief Executive Officer Robert Friedland said Tuesday.

Ivanhoe is building the Oyu Tolgoi copper mine in Mongolia in partnership with Rio Tinto PLC (RIO.LN, RIO) and the Mongolian government. The underground copper mine will have two primary mine shafts, a vast copper concentrator complex and an airport, and production is "ahead of schedule," Friedland told attendees of the Metal Bulletin Global Copper Markets Forum in New York.

Oyu Tolgoi is forecast to have 38 years of mine life with around 81 billion pounds of copper reserves, with analysts projecting that the reserves figure will likely increase as the project develops.

In addition to copper, Oyu Tolgoi will also produce around 3 million ounces of silver each year and substantial amounts molybdenum.

"There is no shortage of ore at Oyu Tolgoi," Friedland said. "By year seven we will produce 1.7 million ounces of gold, and the silver and molybdenum alone will more than cover the cost of production," he said.

The project will have a cash cost of around $35 a metric ton, one of the lowest in the world for greenfield production, he said. The mine is expected to produce about 100,000 metric tons of copper a day.

Source: Dow Jones Newswires