Turquoise Hill announced on Tuesday that Oyu Tolgoi has completed the sinking of Shaft 2, including reaching final depth, shaft bottom mass excavation and concrete floor installation, marking an early milestone in the development progress of Hugo North Lift 1, part of the mine’s massive underground development.

“The completion of Shaft 2 sinking is the first of a number of key milestones that will lead to production of copper and gold from Hugo North Lift 1. At peak production around 2025, Oyu Tolgoi is expected to be the world’s third largest copper mine,” said Turquoise Hill CEO Jeff Tygesen.

Shaft 2 is 1,284 meters in depth, 10 meters in diameter and will be used for access, production and ventilation.

Despite the recent declaration of force majeure at Oyu Tolgoi, there has been no disruption to goods and services arriving for underground development, Turquoise Hill reported.

On January 17, it was announced that Oyu Tolgoi declared force majeure in connection to customer contracts for concentrate due to a protest by Chinese coal transporters in the area of the Gants Mod border crossing. Protestors used a large number of vehicles to obstruct the main access road within China to the Chinese-Mongolian border. The main border crossing for goods and supplies is open. The protestors are Chinese companies who are opposed to having to pay the social and health insurance of the Mongolian drivers employed by the companies.

Deputy Minister of Foreign Affairs B.Battsetseg recently reported that the issue had been resolved and that both sides of the border were open. Turquoise Hill provided an update on the situation, reporting that the force majeure for Oyu Tolgoi concentrate delivery customer contracts remains in place.

“A consistent period of convoy crossing in order to determine a stable concentrate supply chain is required before force majeure can be lifted,” the company reported.

Oyu Tolgoi has said that safe and normal mine operations have been maintained and no production impact is expected.


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