Posted in | Copper | Mining Business

Rio Tinto Bets on Ivanhoe Mines

Ivanhoe Mines received a financial shot in the arm from Rio Tinto as it bought shares worth US$393 Million to increase its ownership to 29.6% in the company. The funds generated are to be used to start the construction of the Oyu Tolgoi Copper – Gold Mining complex in Mongolia.

Oyu Tolgoi is the world's largest undeveloped copper-gold project and is located in the South Gobi region of Mongolia, approximately 550 km south of the capital, Ulaanbaatar, and 80 km north of the Mongolia-China border. Image Credit: Ivanhoe Mines Ltd.

Robert Friedland, Executive Chairman of Ivanhoe Mines and John Macken, President and Chief Executive Office made a statement saying that Rio Tinto had exercised Series A warrants four months before time to help Ivanhoe in the development and construction of the Mongolian mining complex at Oyu Tolgoi.

The Series A warrants were acquired by Rio Tinto in October 2006 as part of the private-placement agreement with Ivanhoe Mines. According to Mr. Macken the Rio Tinto company had a past and potential investment of about US$ 2.5 billion since the 2006 agreement was signed.

Ivonhoe stocks were set to fall and the company itself may not have survived if the negotiations with Rio Tinto had failed. It is easy to understand the jubilation in the Ivanhoe management at the new funding which it has received.

Joel Scanlon

Written by

Joel Scanlon

Joel, originally from the UK, emigrated to Australia in 1995 and spent 5 years working in the mining industry as an exploration Geo-technician where he developed skills in GIS Mapping and CAD. Joel also spent a year working underground in a gold/copper mine. Upon moving to the North Coast of NSW, Australia Joel worked as a graphic designer for a leading consultancy firm before starting a successful business providing graphic and web design services to local businesses on the eastern seaboard of Australia. Joel is skilled in project management, content production, design, animation, database and networking, software, and editing. Joel has been with AZoNetwork since its inception in 2000.

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