Oyu Tolgoi output slips as Rio Tinto eyes expansion of Mongolian mine

Rio Tinto says the fall in copper and gold production at its Oyu Tolgoi mine in Mongolia was in line with expectations.

Rio Tinto's Oyu Tolgoi copper mine in Mongolia. The company has plans to expand the Mongolian mine and more than double its annual copper production.

Rio Tinto’s Oyu Tolgoi mine has reported a fall in copper and gold production as it mined less in areas with higher-grade metals.

Production of copper in concentrate fell to 51,700 tonnes in the second quarter of 2016, compared with 55,300 tonnes in the second quarter of 2015.

Gold production slumped to 70,000 ounces in the quarter, down from 238,000 ounces in the previous corresponding period.

The Mongolian mine is majority-owned by Canadian-listed Rio Tinto subsidiary Turquoise Hill, while the Mongolian government has a minority stake.

Turquoise Hill chief executive Jeff Tygesen said the lower production was as expected, “reflecting reduced mining in Phase 2 of the open pit, which included higher grades of both copper and gold”.

During the second half of 2016, gold production is also expected to be lower as the operator mines areas that have reduced grades, Mr Tygesen said.

The company reaffirmed copper production guidance of 175,000 to 195,000 tonnes and gold production guidance of 255,000 to 285,000 ounces during 2016.

Meanwhile, silver production jumped in the quarter, reaching 391,000 ounces, compared with 297,000 ounces during the previous corresponding period.

Rio Tinto has plans to expand the Mongolian mine and more than double its annual copper production, while speculation has also swirled that the Australian giant is trying to increase its exposure to the project.