Agreement established on supplying power for Oyu Tolgoi’s mining operations www.montsame.mn
On January 26, the agreement on supplying power for Oyu Tolgoi’s mining operations from the country’s central power grid was established between the ‘National Power Transmission Grid’, ‘Southern Region Electricity Distribution Network’ state-owned joint stock company, ‘National Dispatching Center’, and ‘Oyu Tolgoi’ LLC.
At the signing ceremony, Minister of Energy N.Tavinbekh highlighted that the decision to supply power for the Oyu Tolgoi mine is an important event for the country’s economy as well as the energy sector. He then continued on to say, “The establishment of the agreement today serves as a “guarantee” for Mongolia’s economy and income for the energy sector. Once the agreement comes into effect, it becomes possible to keep the funds amounting to a minimum of USD 120 million - the annual fee for importing electricity, in the country. This would also result in a decrease of outflow for foreign exchange reserves. Furthermore, the agreement would serve as a crucial document for sourcing the corresponding necessary financing for the Tavantolgoi TPP project and carrying out works to renew the equipment being used for the energy sector.”
Following the signing of the agreement, CEO of ‘Oyu Tolgoi’ LLC Armando Torres underlined that electricity is crucial for the mine, and said, “A very reliable electricity source is needed in order to ensure the safety and carry out continuous operations at the Oyu Tolgoi mine. The Ministry of Energy has informed us that our electricity demand will be supplied from several sources. I am confident that the agreement served as a mutually beneficial solution for both sides. This is one of the results of the efficient way of cooperation between the Government of Mongolia and ‘Oyu Tolgoi’ company based on mutual understanding.”
Currently, the Government of Mongolia is carrying out works in phases to put certain strategically-important mining deposits in the Southern Gobi region into economic circulation, such as those in Nariinsukhait, Ovoot Tolgoi, Tavan Tolgoi, Oyu Tolgoi, Tsagaansuvarga, and Shivee-Ovoo. In aims of supplying electricity for the aforementioned deposits in its framework, the construction of a 670 km-long aerial power transmission line and three 220 kW substations were completed in 2021.
Works are also being carried out by the government to establish the 450-MW Tavantolgoi TPP, which will replace the electricity being imported from the power grid of Inner Mongolia, PRC.