Oyu Tolgoi’s US$4.4 billion underground mine development financing agreement has been named Asia Pacific Mining Deal of the Year at the 2015 Project Finance International (PFI) Awards.

In awarding Oyu Tolgoi, PFI highlighted the project’s important contribution to not only Rio Tinto’s business, but also Mongolia and its people.

“As well as containing reserves and resources that make it one of the world’s largest copper-gold deposits, Oyu Tolgoi will have a transformative effect on the nation and the people of Mongolia, and is an important long-term partnership with the Government of Mongolia,” PFI reported.

Taking a partnership approach is a hallmark of the project. Oyu Tolgoi is owned by the Government of Mongolia (34 per cent) and Turquoise Hill Resources (66 per cent). Rio Tinto, in turn, owns 51 per cent of Turquoise Hill Resources and has been the manager of Oyu Tolgoi since 2010.

“This kind of mining development partnership model sets the industry benchmark for future schemes and underscores Rio Tinto’s commitment to responsible and prudent growth,” Jean-Sébastien Jacques, Rio Tinto’s chief executive Copper & Coal said.

“This large-scale development, which includes massive infrastructure and social investment in Mongolia, would not be possible without partnership between government, financiers, businesses, suppliers and social enterprises.”

Jean-Sébastien says the Oyu Tolgoi project represents the future of mining development, where there will be more joint venture partnerships sharing risks and benefits.

“If the governance and contractual settings are right at the start, and the partners share the same strong values, there’s no reason why JVs can’t succeed. It is a way of sharing risk and capabilities,” Jean-Sébastien said.

The signing of the project financing agreement in December 2015 was an unprecedented milestone for the Oyu Tolgoi project, which has been operating as an open-pit only mine since 2013, and a vote of confidence in both the project and Mongolia.

The agreement represented one of the largest mining lending deals in 2015. It includes funding by international financial institutions and export credit agencies representing the governments of the US, Canada and Australia, along with 15 commercial banks.

More information about the awards is available to subscribers on the Project Finance International Awards website, or read more about the Oyu Tolgoi project.

Source: riotinto.com