Posted on 07 Sep 2022
Anglo-Australian mining giant Rio Tinto and Turquoise Hill Resources say they have signed a binding agreement enabling Rio Tinto to own 100% of the Canadian company.
On 1 September, the companies had announced an agreement in principle on the deal that will give Rio Tinto greater control of the Oyu Tolgoi copper-gold mine in Mongolia. Rio Tinto will pay $3.3 billion. The deal ends a six-month takeover fight and increases Rio Tinto’s involvement with copper, Kallanish notes.
The agreement calls for Rio Tinto to acquire the 49% of Turquoise Hill stock it does not own. It will pay CAD 43.00 ($32.70) per share. It had initially offered CAD 25.68/share last March.
The deal must be approved by shareholders with votes expected in fourth quarter 2022. It must be approved by two thirds of Turquoise Hill shareholders. More than 50% of minority shareholders must also vote in support.
The Mongolian project has been jointly owned by the government of Mongolia (34%) and Canada-based Turquoise Hill Resources (66% with Rio Tinto owning a controlling interest of 50.8%). Rio Tinto has managed the project since 2010. Production started from the open pit-mine in 2013.
The $7 billion underground mine expansion began production last January. The complex is projected to be the fourth-largest copper mine in the world by 2030. It is expected to produce 500,000 tonnes/year of copper on average from 2028 to 2036 from the two mines.
Source:Kallanish
