Sign in Subscribe
Mining industry

Confusion Surrounds Ivanhoe Mines' Joint Venture with Rio Tinto in Mongolia

Strategic Insights

— 2 min read

Reports surrounding Ivanhoe Mines' massive joint venture with Rio Tinto in Mongolia have sent shockwaves through the global financial community, with several journalists misquoting a crucial figure related to the Oyu Tolgoi gold and copper mine. The mistake, which has been likened to a "Barnaby Joyce moment," saw reporters substituting "billions" with "trillions" when referring to the mine's estimated value. In reality, Ivanhoe's chairman, Robert Friedland, presented a $US16,078,743,199 after-tax net present value (NPV) figure for Oyu Tolgoi, but noted that the project contains an estimated $US1 trillion worth of metal in situ. The confusion was fueled by Friedland's reputation for delivering "big-picture" presentations that often spark excitement among investors.

Key Takeaways:

  • Ivanhoe Mines Ltd's joint venture with Rio Tinto Ltd in Mongolia has been surrounded by confusion among reporters, with several misquoting a crucial figure related to the Oyu Tolgoi gold and copper mine.
  • The mistake was sparked by Ivanhoe's chairman, Robert Friedland, who presented a $US16,078,743,199 after-tax net present value (NPV) figure for Oyu Tolgoi in a PowerPoint presentation.
  • Friedland noted that the project contains an estimated $US1 trillion worth of metal in situ, correcting widespread reports that the NPV was a monumental $US16 trillion plus.
  • Oyu Tolgoi is expected to be one of the world's largest mines, with 1,387,430,000 tonnes of resources in the measured and indicated categories.
  • The project is expected to boost Mongolia's gross domestic product by 30 per cent and lift employment nation-wide by 10 per cent.
  • Ivanhoe's Australian arm, Ivanhoe Australia Ltd (ASX:IVA), is reporting strong exploration success from its tenements in Queensland's Cloncurry region.
  • Robert Friedland, Ivanhoe's chairman, has a reputation for delivering "big-picture" presentations that often spark excitement among investors.
  • Oyu Tolgoi is set to be a significant contributor to Mongolia's economy, with the potential to create thousands of jobs and stimulate economic growth.

Statistics:

  • $US16,078,743,199: The estimated after-tax net present value (NPV) figure for Oyu Tolgoi as presented by Robert Friedland.
  • $US1 trillion: The estimated value of metal in situ at Oyu Tolgoi, according to Friedland.
  • 1,387,430,000 tonnes: The amount of resources in the measured and indicated categories at Oyu Tolgoi.
  • 30 per cent: The expected boost to Mongolia's gross domestic product due to the Oyu Tolgoi project.
  • 10 per cent: The expected increase in employment nation-wide due to the Oyu Tolgoi project.

Sources:

  • "Confusion Surrounds Ivanhoe Mines' Joint Venture with Rio Tinto in Mongolia" by Asia Pulse, August 6 (exact reference not provided)
  • (AAP) - Australian Associated Press, August 6 (exact reference not provided)
  • cg - Contributed by: [No author name provided], August 6 (exact reference not provided)

Read more