Canada’s Turquoise Hill Resources (TSX, NYSE: TRQ) is taking Rio Tinto (ASX, LON, NYSE: RIO) to arbitration over the mining giant’s role and obligations to support the company in securing additional funding for the vast Oyu Tolgoi copper-gold-silver mine in Mongolia.
Turquoise Hill said a special committee of its board, which approved the arbitration, concluded that Rio’s approach to the financing of the mine expansion was “incompatible with the company’s announced strategy to maximize debt and/or hybrid financing for the Oyu Tolgoi project so as to minimize the size, and defer the timing, of an equity rights offering (if any)”.
The Rio Tinto-controlled company and mine operator had expected the underground expansion to cost $5.3 billion when it was approved in 2015.
Last year, however, Turquoise Hill flagged stability risks associated with the original project design, adding that amendments to it could increase costs by as much as an additional $1.9 billion.
Turquoise Hill also warned at the time of further delays of up to two and a half years, with first sustainable production from Oyu Tolgoi’s underground expansion expected between May 2022 and June 2023.
For the rest of this article: https://www.mining.com/turquoise-hill-takes-rio-tinto-to-arbitration-over-mongolia-mine-funding/