Rio Tinto says it remains confident in the long-term prospects for copper, as it pushes ahead with a multi billion-dollar expansion of its key Oyu Tolgoi mine despite a slowdown in the Chinese economy that has precipitated steep falls in global commodity prices.
"When you sit in the lowest cost quartile you should be able to make money at any point in the economic cycle," Rio Tinto's copper and coal group chief development officer Craig Kinnell, told reporters at a site visit.
"It's the biggest and best new project we've got, full-stop, across the group."
When fully operational, the mine is expected to account for one-third of Mongolia's economic output. The underground expansion of the project, which will take between five and seven years and where 80 per cent of the mine value lies, was resuscitated in May after an almost three-year dispute was settled between the company and the Mongolian government, which were seeking a better deal.
In a further step forward, Mongolian government agencies this week agreed to accept a key feasibility study for the project which would allow Rio Tinto and its partners to progress talks with its lenders to recommit to a $US4 billion project finance deal, which had lapsed during the delay.
Mr Kinnell said he expected to sign the renewed project finance deal with the miner's consortium of banks in November. As well as securing finance for the project, Rio Tinto must still strike an electricity deal and obtain other permits from the government before starting construction.
In the more than two years of stop-start talks, which not only halted the expansion of the mine but also deterred potential foreign investors in Mongolia, copper prices have fallen to six-year lows.
Rio Tinto says it remains confident in the long-term prospects for copper, as it pushes ahead with a multi billion-dollar expansion of its key Oyu Tolgoi mine despite a slowdown in the Chinese economy that has precipitated steep falls in global commodity prices.
"When you sit in the lowest cost quartile you should be able to make money at any point in the economic cycle," Rio Tinto's copper and coal group chief development officer Craig Kinnell, told reporters at a site visit.
"It's the biggest and best new project we've got, full-stop, across the group."
When fully operational, the mine is expected to account for one-third of Mongolia's economic output. The underground expansion of the project, which will take between five and seven years and where 80 per cent of the mine value lies, was resuscitated in May after an almost three-year dispute was settled between the company and the Mongolian government, which were seeking a better deal.
In a further step forward, Mongolian government agencies this week agreed to accept a key feasibility study for the project which would allow Rio Tinto and its partners to progress talks with its lenders to recommit to a $US4 billion project finance deal, which had lapsed during the delay.
Mr Kinnell said he expected to sign the renewed project finance deal with the miner's consortium of banks in November. As well as securing finance for the project, Rio Tinto must still strike an electricity deal and obtain other permits from the government before starting construction.
In the more than two years of stop-start talks, which not only halted the expansion of the mine but also deterred potential foreign investors in Mongolia, copper prices have fallen to six-year lows.