Oyu Tolgoi agreement sets faster pace for construction

have reached agreement to see the way forward for the full construction of Oyu Tolgoi including an increase in
development capital. Ivanhoe Mines and Rio Tinto have reached a comprehensive agreement with series of measures to provide funding to complete the accelerated, full- cale construction of the first phase of the Oyu Tolgoi copper-gold complex in southern Mongolia, according to a statement released by Ivanhoe Mines
Office of the Chairman, 8, 2010.
The full series of funding measures, including an interim funding facility from Rio Tinto and cash on hand available to Ivanhoe Mines, could increase to US$6.5 billion the pool of development capital available to Ivanhoe to bring Oyu Tolgoi into full production and to finance associated investments.
As part of the new agreement, Rio Tinto has committed to participate directly in several funding measures – including the forthcoming rights offering announced by Ivanhoe Mines on October 18 – that could generate up to US$4.4 billion of the potential US$6.5 billion.
Rio Tinto has also agreed to work closely with Ivanhoe Mines to complete a major project- finance package that Ivanhoe is negotiating with a group of international financial institutions, government credit agencies and commercial banks.
Ivanhoe Mines Executive Chairperson and Chief Executive Officer,Robert Friedland said, “The mutually beneficial evolution and expansion of the scope of Ivanhoe’s four-year relationship with Rio Tinto comes at a pivotal time in the development of OyuTolgoi.” He said, “Successful completion of all of the measures that we have identified will give us more than sufficient capital to begin initial production at Oyu Tolgoi in 2012.”
The joint Ivanhoe Mines-Rio Tinto Technical Committee endorsed an estimate that a further US$4.6 billion in capital would be required from the beginning of 2011 to the start of production. By the end of 2010, capital totallingUS$1.4 billion will have been invested in developing OyuTolgoi.
Mr.Friedland said a 2011 budget proposal has been presented to the Board of Directors of Oyu Tolgoi LLC, the Mongolian company that owns and will operate the Oyu Tolgoi Project. The budget will be reviewed by the Ivanhoe Mines board and details will be publicly reported in the near future.
The terms of the expanded and renewed relationship between Ivanhoe Mines and Rio Tinto have been established under a legally binding Heads of Agreement approved by the Ivanhoe Mines Board of Directors and Rio Tinto’s Investment Committee.
The agreement arranges for Ivanhoe Mines to acquire financing for Oyu Tolgoi through a schedule of equity investments and major financing commitments by Rio Tinto, including Rio Tinto’s exercise of all of its rights under the announced rights offering expected to be completed by the end of January 2011. Following completion of the rights offering, Ivanhoe Mines  expects it will have gained assurances of access to up to US$4.4 billion in received, fully committed and readily or potentially available funds. A total of up to US$3.7 billion of the projected capital under the various investments and rights will come from Rio Tinto, including proceeds from warrants, a subscription right, up to US$1.8 billion in interim financing and approximately US$500 million as Rio Tinto’s estimated share of the rights offering.
Rio Tinto will work with Ivanhoe Mines toward a shared goal of successfully concluding current negotiations for a long-term, limited recourse project-finance package of up to US$3.6 billion during the first half of 2011, which then would replace any interim financing advanced by Rio Tinto.
Mr. Friedland said in exchange for its capital and commitments, Rio Tinto would have the right to a maximum
ownership stake in Ivanhoe Mines of up to 49% during the next 13 months and, subject to approval of the Oyu Tolgoi board, Rio Tinto will assume management of the building and operation of the Oyu Tolgoi mining
He said, “The corporate cooperation, commitments and shared purpose represented in our new agreement are good news for OyuTolgoi, for the people and government of Mongolia and for the shareholders of Ivanhoe Mines and Rio Tinto.The suspension of the current arbitration procedure for six months, agreed to by both companies, is further confirmation of  our immediate focus on the common objective of building Oyu Tolgoi and provides potential opportunities for the companies to pursue a permanent settlement of issues that have arisen.”
He said, “In less than two years, we expect to be initiating production at Oyu Tolgoi – more than six months
earlier than previously projected. We now have more than 5,500 people based at site, more than 60% of them Mongolians, building what is firmly on track to become one of the world’s largest and mosttechnologically advanced mining operations. Onsite jobs in 2011 will peak at almost 14,000, with an additional 3,700 Mongolians receiving skills training sponsored by Oyu Tolgoi to qualify them for work in the country’s rapidly growing mining sector.”
The Heads of Agreement negotiations with Rio Tinto were conducted for Ivanhoe Mines by the recently created Office of the Chairman, whose principals are Mr. Friedland, Executive Chairman and Chief Executive Officer; Peter Meredith, Deputy Chairman; and Sam Riggall, Executive Vice President, Business Development and Strategic Planning. Tony Giardini, Chief Financial Officer, provided support throughout the negotiations. Citi and Hatch Corporate Finance were advisers to Ivanhoe Mines.
Principal provisions of the Ivanhoe Mines-Rio Tinto Heads of Agreement are summarized in this news release. The full text of the agreement will be available on the Ivanhoe Mines website: www.ivanhoemines.co



Post a Comment

Facebook page

Powered by Blogger.


Advertising in Mongolia An Culture Editorial of the Mongolianviews education Environmental protection Famous Mongolians Foreigners in Mongolia Inner Mongolia Ivanhoe Mines Mongolia agriculture Mongolia analysis Mongolia and Australia Mongolia and Belorussia Mongolia and Cambodia Mongolia and Canada Mongolia and central Asia Mongolia and China Mongolia and Cuba Mongolia and EU Mongolia and Germany Mongolia and Hongkong Mongolia and Hungary Mongolia and India Mongolia and Inner Mongolia Mongolia and Iran Mongolia and Italy Mongolia and Japan Mongolia and Kazakhstan Mongolia and Korea Mongolia and Kuwait Mongolia and Malaysia Mongolia and Nato Mongolia and North Korean Mongolia and Poland Mongolia and Russia Mongolia and Singapore Mongolia and South Korea Mongolia and Taiwan Mongolia and the world Mongolia and Tibet Mongolia and Turkey Mongolia and UK Mongolia and Ukraine Mongolia and UN Mongolia and USA Mongolia and Vietnam Mongolia Banking Mongolia civic society Mongolia crime Mongolia diplomacy Mongolia Economy Mongolia Education Mongolia Energy Mongolia Finance Mongolia Health Mongolia History Mongolia holiday Mongolia in international media Mongolia Industries Mongolia Joke Mongolia law Mongolia LGBT Mongolia medical Mongolia military Mongolia Mining Mongolia Mining Developments Mongolia Mortgage Mongolia natural disaster Mongolia Petroleum Mongolia public announcements Mongolia railways Mongolia Religion Mongolia society Mongolia Sports Mongolia Stamp Mongolia telecommunication Mongolia tourism Mongolia Urbanization Mongolia Wild Life Mongolian Agriculture Mongolian Archeology Mongolian Food Mongolian Gay Mongolian Government news Mongolian History Mongolian Military Mongolian Mining Development Mongolian Movie Mongolian News Mongolian Parliament Mongolian Political news Mongolian Press Mongolian Songs Mongolian Women Mongolian Youth Mongolians abroad Moninfo Opinion Oyu Tolgoi Investment Agreement Photo news Press Release Rio Tinto Tavan Tolgoi coal mine Ulaanbaatar development Weird expatriates in Mongolia

Blog Archive


Live Traffic