Ivanhoe Mines warned this week that if a deal to import power from China for its Oyu Tolgoi copper and gold mine in Mongolia falls through, the company may have to construct a coal-fired power plant ahead of schedule. Building the power plant would delay commercial production and add to the initial costs of building the mine.

“Although construction of a power plant is expected as part of the Oyu Tolgoi project's future development, there is no provision for a plant in the current capital cost estimates for 2011 and 2012 and the financing that would be required is not contemplated as part of the company's current financing plan,” Ivanhoe said in a statement.

Ivanhoe has held talks with the Mongolian and Chinese governments to secure power from China by the third quarter of next year. However if that is not possible a study of alternate arrangements has found that advocating the construction of the coal-fired power plant in Mongolia would be the best option.

The project is expected to begin production in 2013.