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REGIONAL NEWS - ASIA Petropavlovsk Extending Development Period for Pressure Oxidation Hub Oyu Tolgoi Export Startup Back on Track Worker adjusts equipment at Petropavlovsk's pilot plant in Blagoveschensk, Russia, where it does bulk sample testing and training of personnel in preparation for the launch of a pressure oxidation project at its Malomir mine. Petropavlovsk plc announced in midMay that it is extending by 12 to 18 months the development period for the pressure oxidation hub and related flotation plant it is building at its Malomir operations in Russia's Far East. Petropavlovsk is Russia's second-largest gold producer and is listed on the Main Market of the London Stock Exchange. The company produced 710,400 oz of gold in 2012 and is forecasting 2013 production of 760,000 to 780,000 oz from a combination of four hard rock mines and alluvial operations in Russia's Far East. Extending the development schedule for the pressure oxidation hub allows Petropavlovsk to defer $150 million in expenditures that would have been incurred in 2013. Petropavlovsk's pressure oxidation hub is designed to process flotation concentrates of refractory ores from its Pioneer and Malomir mines. The company has more than 10 million oz of gold in its reserve base, and about half of this total is in refractory ores at Malomir and 20 E&MJ; • JULY 2013 Pioneer. The two mines also have oxidized, non-refractory ores. Outotec has the contract for project management services for the pressure oxidation hub project, including detailed technical design of the pressure oxidation plant, equipment selection, oversight of equipment manufacturing, installation and commissioning. Petropavlovsk Chairman Peter Hambro said, "Slowing down the development of the pressure oxidation project does not affect our production outlook for 2013 and 2014 due to recent successes in the company's exploration program, especially at Pioneer and Albyn. The discovery of new, non-refractory resources next to existing production facilities has validated the group's long-term strategy of investment in a comprehensive exploration program in areas with well-known geology and excellent infrastructure. "The group is still committed to completing the pressure oxidation hub and considers it a long-term strategic project that will provide the basis for further profitable growth," Hambro said. Rio Tinto officials announced on June 20 that they expected to soon begin export shipments of production from the $6.2billion Oyu Tolgoi copper-gold mine in Mongolia, after reportedly resolving differences with the government over handling of export revenues from the operation. The media, traders and government officials had earlier been invited to a ceremony at the South Gobi Desert site to witness the first exports to China, according to Reuters. But the event was canceled due to ongoing negotiations between the mine operator and the government. Oyu Tolgoi said first exports remain on track to begin by the end of Q2 2013. Start-up of the mine—the biggest in the country—is being closely watched by other companies and investors rattled over new regulations and concerns raised by the Ulanbataar government over Oyu Tolgoi. The success of the project is vital for Mongolia, as revenue from the mine is expected to comprise 30% of Mongolia's GDP by 2020. It is also a crucial growth source for operator Rio Tinto as it aims to ease its dependence on its iron ore business and cast-off small or unprofitable assets. Rio plans to expand the underground mine, with a final decision pending in 2014. The expansion hinges on finalizing $4 billion in project financing, also expected soon. Rio Tinto's majorityowned Turquoise Hill Resources owns 66% of the project, while the Mongolian government owns the remainder. The exact nature of future investment in the country's mining industry appeared to become more complicated later in June, when the nation's incumbent president was re-elected. Mongolia's share of income from mining was a topic of high interest during the pre-election campaign, with President Tsakhia Elbegdorj's opponents claiming that the government should do a better job of distributing wealth derived from its natural resources to its people. The Elbegdorj administration itself has lately veered in the direction of increased resource nationalism, spooking potential investors. www.e-mj.com