CALGARY — Canadian miner Turquoise Hill Resources Ltd. says the operator of its Mongolian copper-gold mine has declared force majeure after shipments of copper concentrate to Chinese customers were suspended due to COVID-19 precautions at border crossings.

Force majeure is a contract clause that allows a party to escape its obligations if there's an event such as a natural disaster outside of its reasonable control which prevents fulfilling them.

The Montreal-based company says Oyu Tolgoi LLC, in which it has a 66 per cent stake, is reporting two cases of COVID-19 confirmed at the site, while a total of almost 10,000 tests have been negative.

Earlier this month, Turquoise Hill said it expected production of 170,000 tonnes of copper and 525,000 ounces of gold in concentrates from the Oyu Tolgoi mine in 2021 from processing of both open pit and underground development mine ore.

It reported 2020 copper production of almost 150,000 tonnes and gold output of 182,000 ounces.

The company says its open pit mine is continuing to operate uninterrupted but work on its US$6.75 billion underground mine project was halted while testing was underway, adding travel restrictions had interrupted the flow of people to the site.

As of the end of 2020, it reported spending US$4.5 billion on the underground mine which is expected to achieve sustainable production by October 2022.

This report by The Canadian Press was first published March 30, 2021.

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