Rio Tinto Increases Stake in Ivanhoe Mines

Rio Tinto announced that it is increasing its stake in Ivanhoe Mines, a Canadian mineral exploration and development company which is currently developing the world's largest undeveloped copper-gold project in the South Gobi region of Mongolia.

The Anglo-American mining giant is increasing its stake in Ivanhoe Mines to 35% after a $350 million credit facility provided by Rio is converted to shares Ivanhoe. The loan and accrued interest which totalled to $400.8 million converted into 40 million shares at $10 per share. The loan was agreed upon in 2007 and matured today.

The $4.6 billion Oyu Tolgoi copper and gold mine is being constructed by Rio Tinto and Ivanhoe together in Mongolia.

Output from the mines is expected to start in 2013. Based on Ivanhoe Mines' discoveries at Oyu Tolgoi during the past nine years, independently verified estimates indicate that Oyu Tolgoi contains approximately 81 billion pounds of copper and 46 million ounces of gold in measured, indicated and inferred resources.

A US$758 million budget has been allocated to begin full-scale construction of the copper-gold mining complex in southern Mongolia.

Work in 2010 is planned to include:

  • Resumption of the sinking of the 10-metre-diameter Shaft #2, which will be used to hoist ore to the surface from the deep, underground, copper-gold-rich Hugo Dummett Deposit.
  • Construction of a 97-metre-tall (approximately 31 storeys), reinforced-concrete headframe for Shaft #2.
  • Pouring the concrete foundation for the 100,000-tonne-per-day concentrator and deliveries of building materials for the concentrator and infrastructure.
  • Installation of a 20-megawatt power station and 35-kilovolt distribution system.
  • Initial earthworks for the open-pit mine at the Southern Oyu deposits.
  • Continuation of lateral underground development off Shaft #1 at the Hugo Dummett Deposit.
  • Construction of a 105-kilometre highway link to the Mongolia-China border, which will be fully paved by the time production begins.
  • Construction of a regional airport, with a concrete runway to accommodate Boeing 737-sized aircraft.

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