Mongolian Minister: Oyu Tolgoi Project Cost Likely $5 Billion

The Mongolian government expects the Oyu Tolgoi mining project to cost about US$5 billion, mining minister Dashdorj Zorigt said Monday.

Of that amount, US$1 billion has been invested, he said.

A feasibility study which will provide the general framework for the project for at least the next five to ten years is being carried out, he said, adding it's scheduled to be completed soon.

The landmark Oyu Tolgoi mining deal was signed last year with Canada-based Ivanhoe Mines Ltd. (IVN), with participation from Rio Tinto PLC (RTP). The mine has already been operating for a couple years and Mongolia is expected to get US$100 million to US$150 million in prepaid taxes from the project this year, he said.

A projected budget for the next closely-watched mining project, Tavan Tolgoi, is expected at the beginning of the spring session of the Mongolian parliament.

-By Ellen Sheng, Dow Jones Newswires; 852-2832-2336; ellen.sheng@dowjones.com

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