Rio Tinto spends C$529.5 million to raise its stake in Ivanhoe Mines to 48.5 per cent
Rio Tinto (LON:RIO) has increased its stake in Asia Pacific-focused copper, gold and coal miner Ivanhoe Mines (TSE:IVN, NSYE:IVN) amid mounting speculation that it will soon make an offer for the entire business.
Under an agreement between the two companies Rio has exercised its right to acquire shares in Ivanhoe to the tune of approximately 27.9 million, so that Rio now holds 48.5 per cent of Ivanhoe.
The price paid by Rio per share was C$18.98, which means that the total amount paid was C$529.5 million.
Rio has the right to acquire a maximum shareholding in Ivanhoe of 49 per cent, according to the current agreement between the two companies.
Meanwhile Rio said that, depending upon its assessment of Ivanhoe's business, prospects and financial condition, as well as the market for Ivanhoe's securities and general economic and tax conditions, it will consider availing itself of the right to acquired further securities in the company.
Rio added that today's subscription also reinforced its commitment to the Oyu Tolgoi project in Mongolia, which it sees as a natural fit with its strategy of focusing on cost competitive, long-life assets with significant growth potential.
Ivanhoe has a 66 per cent interest in the world-class Oyu Tolgoi copper and gold mine development project in southern Mongolia, as well as a 57 per cent interest in Mongolia coal miner SouthGobi Resources and a 62 per cent interest in Ivanhoe Australia (ASX:IVA, TSE:IVA), which is developing the Merlin molybdenum-rhenium project in Australia.
