Gold production declines by 11%
Deirdre Lingenfelder, CEO of Oyu Tolgoi LLC, addressed challenges stemming from labor law changes in 2022 during the company’s presentation of first-quarter performance indicators and updates on the underground mining project. Notably, difficulties in calculating overtime and night shift pay led to disparities in salaries and employee dissatisfaction. To address these issues, an agreement was reached with the trade union in 2022, resulting in revised procedures for determining average salaries, which began implementation last quarter. Lingenfelder emphasized the importance of this decision for the company’s operational efficiency and long-term employee stability.
Performance highlights for the first quarter of 2024 include the production of 46,084 tons of copper in concentrates and 42,751 ounces of gold in concentrates. While total ore processing production remained on track, challenges in the transmission system to the concentrator led to a slight reduction in planned ore arrival. Consequently, copper and gold production fell by 11 percent and 16 percent respectively compared to initial projections. Efforts to mitigate future difficulties include optimizing ore extraction plans, controlling equipment repairs, and refining ore mixing strategies.
Significant progress has been made in the construction of the underground mine, with the mining team surpassing its initial three-month plan by achieving 3,850 meters of cross-mining. Additionally, construction of a conveyor belt linking the underground mine to the surface is underway, scheduled for completion in the second quarter of this year. This infrastructure investment is crucial for future ore extraction goals, as underground mining yields higher copper and gold content compared to open-pit mining.
The company remains committed to local sustainable development, allocating 7.8 billion MNT for projects and programs, with a focus on education and infrastructure sectors. Moreover, substantial contributions to national revenue are evidenced by the payment of 629 billion MNT in taxes, fees, and other payments, alongside significant domestic spending totaling two trillion MNT. Operational procurement efforts have supported local suppliers, with 693 suppliers engaged, including 538 domestic suppliers, further stimulating economic growth in the region.