Rio Tinto Group is proposing to buy the 49 per cent of Canadian miner Turquoise Hill Resources Ltd. it doesn’t already own for US$2.7-billion, potentially putting an end to years of strife with Turquoise Hill’s management and shareholders.
London-based Rio, one of the world’s biggest diversified mining companies, said on Monday it is offering $34 in cash a share for Turquoise Hill, a 32-per-cent premium to its Friday close on the Toronto Stock Exchange.
Montreal-based Turquoise Hill holds a 66-per-cent ownership stake in the Oyu Tolgoi copper mine, with the Mongolian government owning the rest. Oyu Tolgoi has been plagued by massive capital cost blowouts, multiyear production delays, tension between Rio and Turquoise Hill over funding, and tax disputes with Mongolia.
Rio is making its offer for Turquoise Hill after a January agreement with the Mongolian government that smoothed the path for the underground mine development to proceed.
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