Rio Tinto has moved to cement its control of Ivanhoe Mines of Canada and the huge Oyu Tolgoi copper and gold project in Mongolia.
Rio said yesterday that it would spend $US393 million (or $A450.8 million) to acquire shares in Ivanhoe, ensuring Ivanhoe has funds to develop the jointly owned project.
Rio’s investment, through the early exercise of warrants, will lift its stake in Ivanhoe by 7.3% to 29.6%.
Rio holds further warrants over Ivanhoe shares and has made a $US350 million loan to Ivanhoe, with the rights to convert both into Ivanhoe shares.
"After the completion of the exercise of the Series A warrants, Rio Tinto will own 144.66 million shares of Ivanhoe.
"If Rio Tinto were to exercise all of its remaining share purchase warrants and convert its US$350 million loan into shares it would own approximately 267.8 million shares of Ivanhoe representing an interest in Ivanhoe of around 44 per cent.
"Exercising the warrants early ensures Ivanhoe has sufficient funds to meet the current Oyu Tolgoi development schedule.
"Our further investment in Ivanhoe Mines underlines our confidence in the quality of the world class Oyu Tolgoi deposit and its priority in our project portfolio," said Andrew Harding, Rio Tinto’s chief executive, copper in yesterday’s statement.
