Oyu Tolgoi Underground Expansion Advances Under Rio Tinto as Global Copper Demand Intensifies

The Oyu Tolgoi mine in southern Mongolia is entering a defining phase of its development, as underground expansion progresses under the operational control of Rio Tinto.

Widely regarded as one of the most important copper-gold projects in the world, the operation is positioned to become a cornerstone of global copper supply over the coming decades.

The mine is operated by Oyu Tolgoi LLC, the locally incorporated entity responsible for all site activities. Rio Tinto exercises management control following its full acquisition of Turquoise Hill Resources in 2022, simplifying the ownership structure and enabling more direct decision-making at the project level.

Oyu Tolgoi initially commenced production as an open pit operation, producing copper concentrate alongside gold as a by-product. However, the long-term value of the asset lies in its vast underground orebody, which is being developed using block caving—one of the most efficient large-scale underground mining methods.

Once fully ramped up, the underground operation is expected to increase total production to over 500,000 tonnes of copper per annum, placing Oyu Tolgoi among the world’s largest copper producers. This production profile will position the mine as a Tier 1 asset, defined by scale, long mine life and low operating costs.

Block caving at this scale requires significant upfront capital and precise geotechnical management. The method involves undercutting the orebody and allowing it to collapse under gravity, enabling continuous extraction with relatively low operating costs once established. However, the complexity of cave propagation, ground stability and material flow presents ongoing technical challenges.

As of April 2026, underground development continues to advance, with production ramp-up underway.

Key focus areas include:

• Completion of underground infrastructure and drawbell development

• Optimisation of ore handling systems from underground to surface

• Integration of ventilation and safety systems

• Alignment of underground production with concentrator capacity

The scale of the operation is reflected in its infrastructure. Oyu Tolgoi includes a large concentrator, extensive power supply systems and significant water management infrastructure in one of the world’s most remote mining regions.

Oyu Tolgoi is central to Mongolia’s economy, representing a major source of GDP, export revenue and employment. The Mongolian government’s 34% ownership stake underscores its national importance, while also requiring careful alignment between commercial objectives and national interests.

From a global perspective, the project’s timing is critical. Copper prices as of early 2026 are trading in the range of approximately US$4.00 to US$4.50 per pound (US$8800-US$9900/t), driven by demand from electrification, renewable energy systems and infrastructure development.

As existing copper operations face declining ore grades, large-scale projects like Oyu Tolgoi are essential to maintaining supply. Its long-term production profile provides stability in an increasingly constrained market.

Oyu Tolgoi represents a textbook example of modern mega-project execution. The transition from open pit to underground mining introduces a new level of complexity, requiring integration across multiple disciplines including geotechnical engineering, processing, logistics and workforce management.

Key executive considerations include:

• Managing capital intensity while achieving production targets

• Ensuring geotechnical stability in a large-scale block cave

• Aligning underground output with processing capacity

• Maintaining strong stakeholder relationships with government and local communities

The simplification of ownership following Rio Tinto’s acquisition of Turquoise Hill has been a critical step in improving governance and accelerating decision-making.

Oyu Tolgoi is more than a single mining project - it is a benchmark for the future of large-scale resource development. It combines technical complexity, geopolitical considerations and market significance in a way few projects can match.

For the global mining industry, its success will demonstrate how large, capital-intensive assets can be developed and operated in challenging environments while delivering long-term value.

For executives and investors alike, Oyu Tolgoi remains one of the most important projects to watch as the energy transition continues to drive demand for copper and other critical minerals.