Mineweb Articlehttps://www.mineweb.co.za/mineweb/view/mineweb/en/page34?oid=90288&sn=Detail
OYU TOLGOI DEAL SIGNED
Rio Tinto says it has signed Oyu Tolgoi agreement
After6 years in the making, the massive deal between the Mongoliangovernment, Rio Tinto and Ivanhoe to develop the Oyu Tolgoi copper-goldproject has finally been signed
Author: Mineweb Reporter
Posted:Tuesday,06 Oct 2009
Rio Tinto announced Tuesday morning it hassigned an investment agreement with the government of Mongolia todevelop the Oyu Tolgoi copper-gold complex in Mongolia's South Gobiregion with Ivanhoe Mines.
According to the diversified miner production from the copper-goldproject is expected to commence in 2013 with a five year ramp up tofull expected production of 450,000 tonnes of copper per year and330,000 ounces of gold.
"Oyu Tolgoi is consistent with Rio Tinto's strategy of investing inlarge, long life, low cost ore bodies," Bret Clayton, chief executiveof Rio Tinto's Copper and Diamonds group, said.
"While the size and grade of the existing Oyu Tolgoi ore reservesand mineral resources are already world class, we are also excited bysignificant exploration upside that still remains," he added; "We planto be a partner here in Mongolia for decades to come."
Under the terms of the agreement the Mongolian government will own34% of Ivanhoe Mines Mongolia Inc LLC, the license holder of the OyuTolgoi Project. Key terms include a stable operational and taxenvironment, provisions dealing with the Government's equityparticipation and financing arrangements.
After 6 years in the works, it is believed the Oyu Tolgoi investmentagreement will set a precedent for future foreign mining companyinvestments in Mongolia and it is believed the project will increaseMongolia's GDP by 34% annually.
Rio Tinto initially made a US$303 million investment in a 9.95%shareholding in Ivanhoe Mines Ltd in October 2006 under the terms of aPlacement Agreement, and has the obligation to invest US$388 millionfor a further 9.95% holding at the conclusion of an unconditionalinvestment agreement with the Mongolian government