Oyu Tolgoi to start exporting copper on July 9
Rio Tinto will start exporting copper from the $6.2 billion Oyu Tolgoi mine in Mongolia on Tuesday, the Mongolian government said, but it was not clear if the miner would be able to repatriate sales revenue from the mine.
The unlocking of ore shipments is key for Rio to secure a further $4 billion in project funding for the expansion of the mine, which will significantly boost the Anglo-Australian miner's copper portfolio and ease its dependence on iron ore
Eoin Treacy's view Oyu Tolgio was heralded as one of the world's most promising copper discoveries when the marketing process was put in place to raise enough capital to develop it. The supply inelasticity that helped stoke the bull market in commodities from the early 2000's was predicated on the inability of miners to increase output. Is that still true?
In the last decade billions of Dollars have been spent on devloping new mines which are now coming on line. Oyu Tolgoi represents a major source of additional supply. The fact that BHP Billiton and other major miners have been cancelling new projects suggests efforts are underway to contain oversupply but the trend in industrial metal prices suggests a new demand catalyst is required to spur bullish investor interest beyond short-term scope for an unwind of oversold conditions.