LONDON Nov 5 Rio Tinto's $6 billion Oyu
Tolgoi copper-gold mine has agreed a long-awaited power supply
deal with China, putting it on track to begin commercial
production in the first half of next year.
Analysts and investors had speculated about potential delays
at the mine, which will be one of the world's largest copper
producers, as talks with China over power provision dragged on.
But Rio had said last month there was "real momentum" behind the
Oyu Tolgoi owner Turquoise Hill - formerly Ivanhoe
Mines and now owned by Rio - said on Monday it had signed a
power purchase agreement with state-owned Inner Mongolia Power
Corp, and also agreed to meet the project's power requirements
from within Mongolia four years after production begins.
"This is a key positive for the project, with the power
contract the only major ... item outstanding before the ramp-up
can commence, laying to rest market concerns that failure to
conclude negotiations quickly could delay the project," JP
Morgan analysts said in a note.
Rio said the binding agreement with the Chinese company
meant the commissioning of ore-processing equipment could start
in the next few weeks.
Rio expects group copper production to increase from 2013
thanks to improving grades at existing mines and the start of
production at Oyu Tolgoi, forecasting a cumulative annual growth
rate of 13 percent from 2011 through 2015.
"Turquoise Hill continues to evaluate the development of a
dedicated power plant," the company said in a statement.