Rio Tinto did what many had expected on Tuesday by moving to take a majority stake in Asia Pacific-focused company Ivanhoe Mines.
Following the announcement by Ivanhoe last Thursday that it would dispose of its shareholder rights plan (leaving the door wide open for Rio), the UK-listed miner has now raised its already-sizeable stake to 51% and taken control of the Mongolian Oyu Tolgoi copper-gold mine.
Rio purchased a further 15.1 million common shares of Ivanhoe for C$302m at a price per share of C$20.
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According to the Chief Executive of Rio's Copper division, Andrew Harding, "Rio Tinto's move to a majority stake in Ivanhoe further demonstrates our commitment to the safe and successful development of the Oyu Tolgoi mine for the benefit of all stakeholders."
Rio has long had its eye on the Oyu Tolgoi mine, which is one of the world's largest untapped and which it believes will cost $6bn to develop.
"We are approaching a very important phase in the development of the Oyu Tolgoi mine, with 70 per cent of the construction now complete. The lead-up to first ore in the second half of 2012 will mark an important milestone in the path towards commercial production of copper concentrate, slated for the first half of 2013," Harding added.
The company also has 'anti-dilution' rights allowing it to buy up additional Ivanhoe securities so as to maintain its 51% stake, and can acquire more under its equity financing right of first offer. Nevertheless, Rio said that there is no current intention to purchase any more Ivanhoe securities.
BC
