CESCO: Rio Tinto Executive: No Interest In Ivanhoe Assets Other Than Oyu Tolgoi
SANTIAGO – Rio Tinto PLC (RIO, RIO.LN) plans to keep hold of the prized Oyu Tolgoi copper and gold project in Mongolia but has no interest in the other assets owned by Ivanhoe Mines Ltd. (IVN, IVN.T), the head of Rio's copper division told Dow Jones Newswires Tuesday.
Andrew Harding said that U.K.-listed Rio has made it clear that the focus of its interest in the Canadian miner was the Mongolian mine project, slated to start commercial production next year.
"We have indicated that our interest in Ivanhoe Mines was in Oyu Tolgoi and not in the other assets," he said during an interview at the annual CESCO copper industry week in Santiago. "We're a 51% owner of the business, but the CEO is Robert Friedland, there's a board in place that has been in place historically," he added. Rio raised its stake in Ivanhoe Mines earlier this year, but Friedland holds a 13.7% interest.
Canadian rules require a potential buyer to own over 90% of a company's shares before forcing a full takeover. Rio recently made a filing to the U.S. Securities and Exchange Commission in which it said it was reviewing its investment in Ivanhoe Mines and anticipates replacing some of the management and at least a majority of the non-Rio-appointed directors, giving it more than a majority on the 14-member Ivanhoe Mines board.
Ivanhoe recently announced plans to sell up to 60% of its shares in a coal subsidiary, SouthGobi Resources. The company has other assets including a gold project in Kazakhstan. Rio is project manager of Oyu Tolgoi, which is 66% owned by Ivanhoe Mines and 34% owned by the Mongolian government. Annual output in the first 10 years is projected to average 1.2 billion pounds of copper, 650,000 troy ounces of gold and more than 3 million ounces of silver.
The physical power infrastructure from the Oyu Tolgoi project to the Mongolia-China border is nearly finished, while the power lines and infrastructure from the Chinese grid to join the Mongolian infrastructure are currently under construction and are expected to be finished in time to allow power to be supplied to the project, Harding said. The company must still negotiate the commercial terms for the supply of power from China and commercial supply agreements would follow, he added.
Copyright © 2012 Dow Jones Newswire
Andrew Harding said that U.K.-listed Rio has made it clear that the focus of its interest in the Canadian miner was the Mongolian mine project, slated to start commercial production next year.
"We have indicated that our interest in Ivanhoe Mines was in Oyu Tolgoi and not in the other assets," he said during an interview at the annual CESCO copper industry week in Santiago. "We're a 51% owner of the business, but the CEO is Robert Friedland, there's a board in place that has been in place historically," he added. Rio raised its stake in Ivanhoe Mines earlier this year, but Friedland holds a 13.7% interest.
Canadian rules require a potential buyer to own over 90% of a company's shares before forcing a full takeover. Rio recently made a filing to the U.S. Securities and Exchange Commission in which it said it was reviewing its investment in Ivanhoe Mines and anticipates replacing some of the management and at least a majority of the non-Rio-appointed directors, giving it more than a majority on the 14-member Ivanhoe Mines board.
Ivanhoe recently announced plans to sell up to 60% of its shares in a coal subsidiary, SouthGobi Resources. The company has other assets including a gold project in Kazakhstan. Rio is project manager of Oyu Tolgoi, which is 66% owned by Ivanhoe Mines and 34% owned by the Mongolian government. Annual output in the first 10 years is projected to average 1.2 billion pounds of copper, 650,000 troy ounces of gold and more than 3 million ounces of silver.
The physical power infrastructure from the Oyu Tolgoi project to the Mongolia-China border is nearly finished, while the power lines and infrastructure from the Chinese grid to join the Mongolian infrastructure are currently under construction and are expected to be finished in time to allow power to be supplied to the project, Harding said. The company must still negotiate the commercial terms for the supply of power from China and commercial supply agreements would follow, he added.
Copyright © 2012 Dow Jones Newswire
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