AKIPRESS.COM - Key government approvals for the expansion of Mongolia’s Oyu Tolgoi copper and gold mine will allow Rio Tinto Group and its partners to advance talks with lenders, according to the state-owned company that holds a stake in the project.

Government agencies have agreed to accept a feasibility study on proposals to develop an underground mine at the site, one of the world’s largest copper deposits, and provided guarantees to the World Bank’s Multilateral Investment Guarantee Agency, state-owned Erdenes Oyu Tolgoi LLC said Monday in a statement, reports Bloomberg.

The approvals show Mongolia’s “resolve to rapidly bring this world-class resource into production and on a broader level further demonstrates that Mongolia is open for business” said Davaadorj Ganbold, executive director of Erdenes Oyu Tolgoi. It holds Mongolia’s 34 percent stake in the mine and Rio-controlled Turquoise Hill Resources Ltd. holds the remaining 66 percent.

The partners will seek to raise as much as $6 billion of external funding for the underground mine, including third-party project financing and sales accords, according to a development plan published by Turquoise Hill in May. Rio is seeking to target 15 to 20 banks to raise more than $4 billion, Jean-Sebastien Jacques, head of its copper and coal business, said in May.

Two years of stop-start talks on the mine’s future were ended in May, when Rio and Mongolia’s government settled disputes that had halted the expansion and acted as a deterrent to foreign investors in the Asian nation. Oyu Tolgoi, located 80 kilometers (50 miles) north of the Chinese border, is forecast to account for about a third of Mongolia’s economy in full operation.

Copper for delivery in three months on the London Metal Exchange was little changed at $5,312 a metric ton at 11:13 a.m. in Sydney. Rio sees the metal poised for longer-term gains, Chief Executive Officer Sam Walsh said Aug. 6.

As output declines at aging mines, producers are encountering difficulties in discovering and developing viable new projects and in securing approvals, which “means that we will see copper moving into short supply going forward,” he told investors in London.

Expansion of Oyu Tolgoi is scheduled to restart in mid-2016, Turquoise Hill said last month. It may take as many as seven years to complete, according to Rio.