Chinalco Mulls Purchasing Direct Minority Stake In Oyu Tolgoi

7th Jul 2010 19:04

By Alex MacDonald Of DOW JONES NEWSWIRES LONDON (Dow Jones)--Aluminum Corp. of China (ACH, 2600.HK) is considering purchasing a direct minority stake in one of the world's largest undeveloped gold-and-copper mine deposits. Canada's Ivanhoe Mines Ltd (IVN) owns a 66% stake in the Mongolian Oyu Tolgoi project and has previously expressed interest in selling a minority stake to a second strategic investor. Rio Tinto PLC (RTP, RIO.LN) owns an indirect interest in the project through its 29.6% equity stake in Ivanhoe Mines. Aluminum Corp., also known as Chinalco, "has indicated an interest" in acquiring a minority equity stake in Ivanhoe or a minority interest in the Oyu Tolgoi project, Ivanhoe said in a U.S. Securities and Exchange regulatory filing Wednesday. Global diversified miner Rio Tinto, the project operator, is also discussing plans with Ivanhoe to convert its indirect equity stake in the project "into a direct ownership interest," Ivanhoe added. "If any arrangement is agreed, it may be a bipartite or tripartite arrangement with" Ivanhoe and/or Rio Tinto, the Canadian-based miner said. Rio Tinto paid $393 million on June 29 to exercise warrants that increased the Anglo-Australian's stake in Ivanhoe to 29.6% from 22.4%. Rio still has enough warrants to increase its stake up to 44%. Rio Tinto has also had discussions about the project with numerous parties including European Bank for Reconstruction and Development and The International Finance Corporation. Rio Tinto intends to continue its discussions with Ivanhoe, Chinalco, the EBRD, the IFC and other third parties, including the government of Mongolia, which owns the remaining 34% of the project, Ivanhoe said. -By Alex MacDonald, Dow Jones Newswires; 44 20 7842 9328; [email protected] (END) Dow Jones Newswires July 07, 2010 14:04 ET (18:04 GMT)