Rio Tinto has reached an agreement with Turquoise Hill on a financing plan for Oyu Tolgoi, to the tune of an estimated US$2.3 bn, in order to complete the underground project.
Rio Tinto has agreed to address any potential funding shortfalls up to US$750m on the same terms as the project financing. Rio Tinto has a 50% interest in Turquoise Hill and 34% economic interest in Oyu Tolgoi.
Equal-weight rating retained. Industry view is In-Line. Target price is $114.
Target price is $114.00.Current Price is $115.50. Difference: ($1.50) – (brackets indicate current price is over target). If RIO meets the Morgan Stanley target it will return approximately -1% (excluding dividends, fees and charges – negative figures indicate an expected loss).