Rio ups stake in Ivanhoe Mines

21st Jun 2011 13:29

Multi-metal miner Rio Tinto is to raise its stake in Toronto- and New York-listed Ivanhoe Mines after exercising its remaining warrants for the ongoing development of the copper and gold Oyu Tolgoi project in southern Mongolia.Rio gave notice on Tuesday that it will be increase its shareholding from 42% to 46.5%, after acquiring over 55.12m shares for a total consideration of $502m (around £309.7m)."Construction is well underway and Oyu Tolgoi plans to spend $2.3bn in 2011 on the project's development. The workforce is expected to peak at 14,000 this year," said Rio Tinto Copper's chief executive Andrew Harding.The increased ownership will permit the company to nominate an additional director to Ivanhoe's board, taking Rio-nominated directors from six to seven out of a total of 14."Rio Tinto took over management of the project in December. Our industry-leading operating and technical capabilities will enable the development of this world-class project to the highest of standards, for the benefit of our shareholders and the people of Mongolia," Harding said.The miner also hinted at the possibility of exercising its subscription right to increase its ownership in Ivanhoe to 49% on or before 18 January:"Depending upon its assessment of Ivanhoe's business, prospects and financial condition, the market for Ivanhoe's securities, general economic and tax conditions, and other factors, Rio Tinto will consider availing itself of its rights to acquire additional securities of Ivanhoe," Rio said.Rio shares rose by 83.5p (+2.04%) to 4,178.5p as at 14:09 on Tuesday afternoon.---BC