A new claim filed in a US court on Thursday over Rio Tinto’s (ASX, LON, NYSE: RIO) handling of the Oyu Tolgoi copper-gold mine expansion in Mongolia accuses the mining giant of concealing the real cause of the delays that have held back its most important growth project.
In a 163-page claim filed in New York, Pentwater Capital Management — the second-largest shareholder in Rio-controlled Turquoise Hill (TSX, NYSE: TRQ) — has included the testimony of 12 individuals who worked for Rio or its contractors and which could tip the balance against the miner.
The document cites defective Chinese steel, incompetent engineering and poor procurement as some of the “true” reasons behind the mine expansion’s massive cost increase and delays.
The fresh claim expands upon the initial class action lodged late last year, which accused Rio of being too slow to tell investors of the cost and schedule blowouts.
Both Rio Tinto and Turquoise Hill have largely blamed the setbacks to the late realization that the project’s geology was weaker than first thought and needed a change of technical approach.
For the rest of this article: https://www.mining.com/class-action-against-rio-tinto-over-oyu-tolgoi-escalates/