* Says board has approved $2.3 bln capex budget for 2011
* 2011 to be peak yr for construction work at Oyu Tolgoi
TORONTO, Dec 13 (Reuters) - Ivanhoe Mines (IVN.TO) said on Monday its board has approved a $2.3 billion capital outlay in 2011 to develop the first phase of its massive Oyu Tolgoi copper and gold project in southern Mongolia.
Oyu Tolgoi is one of the world’s biggest untapped copper-gold deposits. Development was delayed for years due to complicated royalty negotiations between Ivanhoe and the Mongolian government. [ID:nSP495396]
The project is 34 percent owned by Mongolia and 66 percent owned by Vancouver-based Ivanhoe, which is developing it with mining giant Rio Tinto (RIO.AX) (RIO.L). Last week, the two companies put aside a spat and agreed on a new interim financing plan for the $6 billion project. [ID:nSGE6B70F7]
Ivanhoe, led by mining financier and colorful dealmaker Robert Friedland, said 2011 will be the peak year for construction at Oyu Tolgoi -- the mine is expected to begin initial production in 2012.
The company projected capital required for phase one from Jan. 1, 2011, to the commissioning of the ore processing plant in the second half of 2012 at $3.5 billion. It expects to spend an additional $1 billion on the project between commissioning and commercial production, expected to begin in the first half of 2013. ($1= $1.01 Canadian) (Reporting by Euan Rocha; editing by Janet Guttsman)