Rio Tinto ADR plunges over 4%: Rockfall incident at Mongolia's Oyu Tolgoi copper mine halts underground operations

Rio Tinto shares fell on Thursday after a rockfall incident occurred at its Oyu Tolgoi copper mine in southern Mongolia, injuring 15 workers. According to Bloomberg, the mine has temporarily suspended underground operations, and the subsequent impact of the incident is drawing attention.

According to a Xinhua report on Thursday, the rockfall incident at the Oyu Tolgoi copper mine occurred around 6 p.m. local time on October 29.

Oyu Tolgoi LLC, the mine's operator, stated that a sudden seismic geological event in an underground rock fracture zone triggered a localized rockfall, affecting workers at the site. The incident injured 15 workers, and there have been no reports of fatalities so far.

After the incident, the operator activated its emergency response protocol, providing medical checks and treatment for the injured workers, whose conditions are reported to be generally stable. The operator added that a comprehensive assessment of the cause of the incident and the onsite safety status is still underway.

Bloomberg, citing sources familiar with the matter, reported that underground operations at the mine have been temporarily suspended; as of now, the specific duration of the shutdown and the impact on production remain unclear.

Rio Tinto ADRs dropped over 4% during intraday trading on Thursday, hitting a new low since March, before slightly bouncing back to a 3.21% decline as of press time.

Copper prices declined on Thursday; media reports of the incident led to a short-lived spike, but prices later retreated. As of press time, New York copper was down 1.07%.

One of the World’s Largest Copper Mines, Underground Operations Are a Key Growth Engine

Oyu Tolgoi is one of the world’s largest copper mines, utilizing both open-pit and underground mining. Rio Tinto holds a 66% stake in the mine and is responsible for its management, while the Mongolian government owns the remaining 34%.

The mine is also a crucial source of future copper production growth for Rio Tinto. Rio Tinto previously stated that, from 2028 to 2036, combined open-pit and underground operations at Oyu Tolgoi are expected to yield an average annual copper output of about 500,000 tons.

Underground production began in 2023, and as underground mining operations ramp up, the project’s significance within Rio Tinto’s copper business continues to increase.

Following the incident, underground operations have been temporarily suspended. When the mine will resume normal work, and whether safety assessments will affect the subsequent production schedule, are now key questions for observers. There is not yet enough information to determine how much this incident will impact Rio Tinto’s full-year or long-term copper production targets.