Mining Industry

Turquoise Hill seeks Oyu Tolgoi clarity from Rio Tinto

Turquoise Hill seeks Oyu Tolgoi clarity from Rio Tinto
Mining News Pro - Rio Tinto and Turquoise Hill have commenced arbitration proceedings to seek an explanation of financing options for the Oyu Tolgoi gold-copper project in Mongolia.

The arbitration, which will take three to five months follows recent discussions between the two parties related to the re-profiling of Oyu Tolgoi’s existing project debt.

This was contemplated by a memorandum of understanding between Rio Tinto and Turquoise Hill which was announced during September.

Turquoise Hill’s board approved the arbitration via special committee, which concluded that Rio Tinto’s approach to financing Oyu Tolgoi is “incompatible” with Turquoise Hill’s strategy to maximise debt for Oyu Tolgoi’s development.

“The special committee believes that the arbitration will provide needed clarity from an independent third aprty as to the parties’ respective rights and obligations with respect to the financing process,” Turquoise Hill stated.

“The arbitration process is confidential and is expected to take between three and five months to reach a decision.”

Turquoise Hill is advancing its evaluation of financing options for the project to address the disclosed funding gap.

Some of the contemplated options include additional debt from banks or other financial institutions, offering global-medium term notes or a gold streaming transaction.

The company will present its preferred funding options to Rio Tinto prior to December 31, as per the memorandum of understanding.

During September, Rio Tinto announced plans to raise funding for Oyu Tolgoi by re-profiling debt repayments.

The plan was subject to Turquoise Hill making an equity offering for the balance of funding required to complete the project.

This July, costs to develop Oyu Tolgoi rose from $US5.3 billion ($7.2 billion) by a further $US1.3-$US1.8 billion as Rio Tinto started a new underground mine design.

This also caused a delay of 21 to 29 months for first sustainable production from the mine.

   Short Link:  
Related News
setiya hotel
chadormalu Co.
khuzestan steel
sangan steel