Track Record > Case Studies
Case study:
Mongolian copper gold mine project
The world’s largest, undeveloped copper-gold porphyry deposit. When completed, Oyu Tolgoi will be the first project financing in Mongolia and the largest project financing ever completed in the mining sector
Project description
- The Oyu Tolgoi copper-gold mining complex is located in the South Gobi region approximately 550 km south of the capital Ulan Bator and 80 km north of the Mongolian-Chinese border (the “Project”)
- Oyu Tolgoi contains approximately 81 billion pounds of copper and 46 million ounces of gold in measured, indicated and inferred resources
- Oyu Tolgoi is owned 34% by the Mongolian Government and 66% by Turquoise Hill, which in turn is currently 51% owned by Rio Tinto
- Target production of the Project is approximately 28 Mtpa, using both open pit and block cave underground mining process
- The Project requires significant power and rail infrastructure works
HCF’s role
- HCF is currently acting as sole Financial Adviser to Turquoise Hill in sourcing and structuring the project financing of the Oyu Tolgoi copper-gold mine in Mongolia
- HCF identified and assessed key strategic investors to assist Turquoise Hill in the development of the Project
- HCF advised Turquoise Hill on the securing of Rio Tinto as a strategic partner for the Project through the issuance of a series of warrants and a complex convertible debt/option structure
- HCF assisted in the delivery of the Environmental and Social impact assessment (ESIA) to international standards, which was disclosed to the public in Q4 2012
Project financing
- Project Finance in excess of USD 4 billion
- HCF has designed a robust finance structure to support a long development period of the mine over several years and minimise the impact on the Sponsor balance sheet
- HCF has successfully enabled Turquoise Hill to mitigate political risk by the participation of the IFC and EBRD
- HCF has introduced the Export Development Canada (“EDC”), a government agency of Canada and a number of other strong ECAs to the transaction via both tied procurement and untied off-take arrangements to further mitigate political risk and mobilise liquidity in the debt markets
Ongoing mandate