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Oyu Tolgoi releases Q4 Production Report and 2016 Scorecard

Ulaanbaatar, Mongolia,

OYU TOLGOI PUBLISHES 2016 SCORECARD; CUMULATIVE IN-COUNTRY SPEND CROSSES US$6.1bn

- Strong safety and production performance
- Underground development continues to progress
- US$210mn taxes paid; US$279mn in national procurement spend in 2016

Oyu Tolgoi today announced an update on its production for the fourth quarter of 2016 and, released the latest edition of its Performance Scorecard.

Oyu Tolgoi performed better than target on safety in 2016, and continuing to be one of the leading safety performers across Rio Tinto and peers in the broader mining industry.

Armando Torres, Managing Director – Oyu Tolgoi, said, “The Oyu Tolgoi team delivered a strong performance over 2016 despite significant operational and market challenges. Our safety performance continues to be one of the best in Rio Tinto – and indeed, across our global mining peers, achieving an All Injury Frequency Rate of 0.22 for the year. Oyu Tolgoi also achieved record setting performance in the open pit operation, and underground development continues to progress well – establishing a strong foundation for the year ahead.”

Oyu Tolgoi’s open pit mining and concentrator operations in 2016 achieved record levels for material mined and ore treated, and exceeded both copper and gold production guidance for the year. Concentrator performance during the fourth quarter was strong with the highest throughput since production began.

During Q4’16, progress continued in key areas of underground development with the national workforce working on the underground project crossing 2,000 personnel; Shafts 2 and 5 related activities and construction of critical on-site facilities continued, and the bulk excavation component for the conveyor-to-surface work stream was completed. Lateral development rates are progressing well with a further increase expected in 2017, when additional underground crushing capacity is added.

Oyu Tolgoi is expected to produce 130,000 to 160,000 tonnes of copper in concentrates and 100,000 to 140,000 ounces of gold in concentrates for 2017.

Q4’16 Scorecard

Oyu Tolgoi’s total in-country spend since 2010 crossed US$6.1 billion at the end of Q4 – demonstrating a strong, continuing commitment to local content in both operations and underground development, including US$760 million total spend in country in 2016.

The company continued its world-class environment performance, achieving an annual average water recycling rate of 86.2 per cent, and using only 0.423 cubic metres of water per tonne of ore processed – one-third the usage of comparable operations worldwide.

At the end of 2016, 93.5 per cent of Oyu Tolgoi’s total workforce was Mongolian, including 96 per cent Mongolian employees at the open pit mining and concentrator operations; and with South Gobi residents comprising 22 per cent of the total workforce.

Oyu Tolgoi continued its strong contribution to the South Gobi community in 2016 achieving procurement spends of US$69 million, and investing US$9.7 million in sustainable development and community infrastructure projects in the region. Two major infrastructure projects saw significant progress in the last quarter, with the Bayan-Ovoo Primary Health Care Center, a two-story building with 10 beds, a surgery and birthing room, and employing 18 staff, including doctors and nurses completed, and the Khanbogd bulk water treatment plant nearing commissioning.

Please click here to see the Scorecard.

Oyu Tolgoi Supplier Forum

Oyu Tolgoi spent 62 per cent of its total procurement expenditures with Mongolian companies in 2016, equalling to US$279 million. With a focus on continuously increasing the Mongolian supplier participation in its supply chain, Oyu Tolgoi will host its 2017 Suppliers Forum on 31 January, 2017 in Ulaanbaatar. The forum is designed to help educate business on working with Oyu Tolgoi, including safety and business integrity principles; and Oyu Tolgoi’s focus on a sustainable in-country supply chain for ‘Life of Mine’ goods and services, covering both operations and underground. For more information, please visit www.ot.mn/suppliers/

Oyu Tolgoi Production Data

All data represents full production and sales on a 100 per cent basis

4Q

2015

1Q

2016

2Q

2016

3Q

2016

4Q

2016

Full Year

2016

Full Year

2015

Open pit material mined (‘000 tonnes)

23,708

22,867

22,716

25,739

25,615

96,938

91,771

Ore treated (‘000 tonnes)

9,369

9,662

9,525

9,146

9,819

38,152

34,537

Average mill head grades:

Copper (%)

0.69

0.70

0.64

0.66

0.61

0.65

0.67

Gold (g/t)

0.92

0.63

0.33

0.21

0.25

0.36

0.78

Silver (g/t)

1.67

1.92

1.92

1.99

1.50

1.83

1.56

Concentrates produced (‘000 tonnes)

231.8

229.5

207.1

203.2

206.7

846.6

788.5

Average concentrate grade (% Cu)

24.7

25.1

24.9

22.9

22.0

23.8

25.6

Production of metals in concentrates:

Copper (‘000 tonnes)

57.3

57.6

51.7

46.6

45.5

201.3

202.2

Gold (‘000 ounces)

207

144

70

37

49

300

653

Silver (‘000 ounces)

355

395

391

361

273

1,420

1,223

Concentrate sold (‘000 tonnes)

236.2

213.1

227.4

206.2

182.0

828.6

819.8

Sales of metals in concentrates:

Copper (‘000 tonnes)

54.7

51.2

54.4

45.7

37.6

188.9

201.3

Gold (‘000 ounces)

160

175

95

38

39

347

737

Silver (‘000 ounces)

360

305

395

341

239

1,280

1,158

Metal recovery (%)

Copper

88.4

85.6

83.3

78.0

76.6

81.0

87.6

Gold

74.2

72.2

69.3

62.0

63.4

68.5

74.4

Silver

70.8

66.4

65.9

61.7

57.2

63.1

69.9

About Oyu Tolgoi LLC (www.ot.mn)

Oyu Tolgoi LLC, Mongolia's largest copper and gold mining company, is a strategic partnership between the Government of Mongolia, Turquoise Hill Resources and Rio Tinto. Located in the South Gobi, Oyu Tolgoi commenced shipment of product to customers in July 2013. Oyu Tolgoi is managed by Rio Tinto, which is investing global expertise and cutting-edge technology to help develop Mongolia’s mining industry and ensure Oyu Tolgoi is one of the world’s most advanced mines. For Oyu Tolgoi, nothing matters more than safety. The business operates under the principle that if a job cannot be done safely, it will not be done at all.

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