Rio Tinto has increased its stake in Ivanhoe to 55.1 million shares making it the owner of 46.5% of the company.
The deal cost Rio Tinto Group $502 million and increases its partnership in the Mongolian mine that the two companies are developing together. It will also allow Rio Tinto to nominate an additional director to the Ivanhoe board and gain influence over half the 14 member board.
The Oyu Tolgoi project in Mongolia is considered the world’s largest untapped copper and gold deposit. The development work at the time is currently underway and first production is expected in 2013. The cost of developing the project which is located in southern Mongolia has been pegged at $5.9 billion.
The warrants that Rio exercised were granted in 2006 and 2007 when it initially invested funds in Ivanhoe. Rio Tinto has committed to convert all warrants to shares by January 2012.
Chief Executive of Rio Tinto’s copper unit Andrew Harding said that exercising the warrants provides further funds for developing Oyu Tolgoi. There are already 14,000 people working in the mine development and nearly $2.3 billion has already been spent on it.