Rio readies for Mongolia pounce

Ulaanbaatar /MONTSAME/ Rio Tinto is edging closer to snaffling the stake in Canada's Turquoise Hill Resources it does not already own in a move to shore up its exposure to key copper asset Oyu Tolgoi as it tries to counter a predicted drop in the iron ore price, reported Friday theaustralian.com website. According to a report in the Daily Mail, Rio will make a cash offer of about $8 per share for the group, which would value the stake at $16.09 billion. The remaining 49.2 percent stake in Toronto Exchange-listed Turquoise is currently valued at $4.495 billion, based on its last close of $4.54, putting a $9.12 billion tag on the whole company. Turquoise owns 66 per cent of the most valuable copper resource in the world, the Oyu Tolgoi mine in Mongolia. Rio is the project operator of the copper and gold mine and has effective majority control through its 50.8 per cent holding in Turquoise. Oyu Tolgoi has been plagued by delays over Rio's failure to strike an investment deal with the Mongolian government but Rio is now suggested to be close to reaching a deal with the Mongolian government for the $6 billion second stage development of the mine. That speculation was sparked by an online job ad seeking "an integrated project team for the next phase of a major EPCM (Engineering, Procurement, Construction Management) mining project in Mongolia." The ad was posted by engineering and project management firm AMEC, which worked on the first phase of Oyu Tolgoi.