Dow Jones reported that Rio Tinto PLC has given notice to complete the second tranche of its investment in Ivanhoe Mines Limited, which will increase its holding from 9.9% to 19.7%.
The announcement follows the signing last week of an investment agreement with the government of Mongolia for the development of the Oyu Tolgoi copper gold complex in Mongolia's South Gobi region, which is expected to start production in 2013.
The terms of the placement were negotiated as part of a strategic partnership between Ivanhoe and Rio Tinto announced three years ago to develop Oyu Tolgoi. Rio Tinto can under the current financing agreement boost its Ivanhoe stake to almost 47%.
Ivanhoe said that the funds will boost its cash position to about USD 725 million and help it build an open pit mine at Oyu Tolgoi as well as advance development of the underground block cave mine.
Ivanhoe said that it now has adequate capital for its current development plans and spending commitments, and is therefore deferring any consideration of the sale of an interest totaling up to 9.9% in Ivanhoe to one or two potential strategic investors.
(Sourced from www.dowjones.com)
