Rio Tinto Mongolia copper output climbs, but China import snag drags on


SYDNEY, Oct 15 (Reuters) - Global miner Rio Tinto could be forced to amass a mountain of copperconcentrate at its new $6 billion Oyu Tolgoi mine in Mongoliawhile Chinese buyers resolve a lengthy customs impasse withtheir government.

The Oyu Tolgoi concentrator continued to ramp up productionin the third quarter and is now operating at maximum processingcapacity of 100,000 tonnes of ore per day, said Toronto-listedTurquoise Hill Resources, which runs Oyu Tolgoi and is66-percent owned by Rio Tinto.

Oyu Tolgoi was supposed to start shipping copper concentrateto China shortly after the mine opened in July. But instead hasbeen forced to stockpile the material while buyers negotiatewith Chinese customs officials over import approvals.

"Oyu Tolgoi's customers are making good progress withChinese customs officials to resolve matters with purchasedconcentrate at the border," Turquoise Hill Chief Executive KayPriestly said in a statement.

Turquoise Hill said it was sticking to a forecast to producebetween 75,000 and 85,000 tonnes of copper in concentrates atOyu Tolgoi in 2013

"Shipments of concentrate are expected to be aligned withproduction rates by the end of 2013," it said.

The mine shipped 38,000 tonnes of concentrate to a bondedwarehouse in China between July and Sept. 18 and another 122,000tonnes was being held in inventory at the mine, the company saidpreviously

Data from Turquoise Hill on Tuesday showed the concentratecontained 43,700 tonnes of copper metal.

The mine also yielded 83,000 ounces of gold and 281,000ounces of silver in the first nine months of 2013, it said.

Given the mine and concentrator are still early indevelopment and operation, ore grades and recovery rates areexpected to improve throughout the fourth quarter, according toTurquoise Hill.

The concentrate is destined for Chinese smelters. Buyers areseeking the necessary approvals to enable them to collect thematerial from the warehouse.

Mongolia has a 34-percent stake in Oyu Tolgoi, but will notshare in any profits until Turquoise Hill recovers all the costsof the project.

Economic growth in the sparsely populated and landlockedcountry is heavily tied to its vast copper and coal resources,and reinvigorating foreign investment has been a top priorityfor its government.

Rio Tinto, which releases its third quarter production datalater on Tuesday, is expected to provide an update on efforts toresume normal operations at its Kennecott copper mine in Utah,following a pit collapse in April.


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