China Data Bullish for Copper

This should provide a positive catalyst for copper over the next year. I continue to hold Turquoise Hill as it closes in on completion of the second phase of Oyu Tolgoi.

It is positioned well for solid returns, as its production levels will rise significantly, and other companies may consider it a good takeover target with the majority of its development stage about to be completed.

Why I Won't Sell Turquoise Hill

At a time when it appears there is nothing to stop the disintegration of the commodity bear market, my outlook for Turquoise Hill (NYSE:TRQ) remains strong.

My reasoning is I believe commodities are closing in on their lows in general, and are likely to begin a rebound in the not-too-distant future. But even if there is more downside to come for an extended period of time (meaning about a year or so), I don't see it having a negative impact on those holding a position in Turquoise Hill for the long term. That's because of the timing of the completion of the second phase construction at its flagship property Oyu Tolgoi.

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Turquoise Hill Won't Remain This Cheap for Long

It's been a long time coming for Turquoise Hill (NYSE:TRQ) and Rio Tinto (NYSE:RIO) concerning their stake in the massive Oyu Tolgoi, as they have finally come to an agreement with the Mongolian government to move ahead with its development of the next phase of the mine, which is to expand the major underground portion of the resource, which at this time, is estimated to account for approximately 80 percent of the mineral value of the mine.

Major sticking points which led to the differences have been resolved, including cost overruns and taxes.

With that behind them, the next areas to approve and make transparent will be an underground feasibility study and project financing. There is little to suggest there will be a problem in those areas, so it appears Turquoise Hill should fairly quickly be able to move operations forward.

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Is it Turquoise Hill's Time?

Financial news outlets were blaring out headlines and lead stories about an alleged agreement between the government of Mongolia and Rio Tinto (RIO) and Turquoise Hill (TRQ) concerning Oyu Tolgoi, the rich mineral resource in the country.


While it would be welcome news to investors if this is in fact the case, I will wait until I hear very clearly from Rio CEO Sam Walsh on his take in the deal.

Just recently Walsh stated very clearly that the final offer was on the table, and it's a check to me that he has been very quiet after the supposed blockbuster announcement from Mongolia’s Prime Minister Saikhanbileg, that past hindrances to the project have been resolved and the project is cleared to move ahead.


If that was really the case, it's very puzzling that there are no confirmations of this outside of a small story and line from Sky News in Australia, which asserted Walsh confirmed the story.
To me, this is too big of a story and impetus for it to be ignored by Rio and Turquoise Hill, if indeed a deal has been made.


Rest of story on Turquoise Hill and Oyu Tolgoi