Rio Tinto’s (LON:RIO) decision on its long-delayed expansion of the Oyu Tolgoi copper and gold mine in Mongolia is likely to be affected by the current slump of the metal, which hit a fresh six-year low this week.

It said it would announce a final decision on the matter early next year

The world’s-second biggest miner, which began production from an open pit of Oyu Tolgoi over two years ago, has not finished lining up financing for the $5 billion expansion,Reuters reports. However it said it would announce a final decision on the matter early next year, as the company believes it has “the right environment today.”

Speaking at a Bloomberg News-sponsored forum, Rio’s copper and coal chief executive, Jean-Sebastien Jacques, said that while the company believes the copper market is facing two or three years more of pain, it is the one commodity they expect to recover the fastest.

Expanding the mine — the biggest single foreign investment in Mongolia — would significantly increase Rio’s exposure to copper, while reducing its reliance on iron ore, where growth in supply and lacklustre demand has sent benchmark prices plummeting to record post-2008 lows this week.



From Minining.com