Tavan Tolgoi-based power plant to be built by 2023
The government and Oyu Tolgoi LLC inked a power source framework agreement (PSFA) on the benchmark of the new year to push forward the construction of Tavan Tolgoi-based power project and establish the basis for a long-term domestic power solution for the mine.
The agreement will contribute to improving domestic power supply to southern region of the country, securing long-term sustainable operation of Oyu Tolgoi, especially its underground mine, as well as boost economic yield from Tavan Tolgoi coal mines and construction of related infrastructure in compliance with the 2018 Parliamentary Resolution No.73.
“We are encouraged by the pivotal decision to proceed with the power project at Tavan Tolgoi. Resolving Oyu Tolgoi’s long-term power requirements is critically important to the mine’s long-term development and today (December 31)’s signing of the PSFA is a positive milestone toward that goal,” said Ulf Quellmann, CEO of Turquoise Hill.
The power source framework agreement was signed by Minister of Energy Ts.Davaasuren and Head of Energy Regulatory Commission A.Tleikhan on behalf of the Mongolian government, while representing Oyu Tolgoi LLC, the company’s Chairman of the Board of Directors G.Batsukh and CEO Armando Torres sealed the deal.
The agreement formalizes the role of each party and sets out an amended timetable for Oyu Tolgoi to source power domestically.
The construction work is expected to start in 2020, following further studies and commissioning of the power plant is scheduled for mid-2023.
Oyu Tolgoi will now move forward to confirm the technical design of the project and finalize the commercial arrangements, including financing, underpinning the agreement. The 300 megawatt plant will be majority owned by Oyu Tolgoi LLC and will be situated close to the Tavan Tolgoi coalfields.
Looking ahead, Turquoise Hill plans to continue to work closely and collaboratively with its partners to finalize the details of the power project, which will allow the company and mine to achieve its full potential for the benefit of all stakeholders.