Rio Tinto: Oyu Tolgoi 2011 Capex May Be More Than $1 Bln
More than $1 billion is likely to be spent on the massive Mongolian Oyu Tolgoi copper and gold project in 2011, a senior executive on the project said Wednesday.
Andrew Harding, chief executive of Rio Tinto PLC's (RIO) copper division said "pretty much" $1 billion was spent on the Oyu Tolgoi project this year and "more than $1 billion" would likely be spent next year, although the final capital expenditure program still needs to be approved. He was speaking at the Mongolian investment summit in London.
Ivanhoe Mines Ltd. (IVN), the principal owner in the project, still needs to approve the final capital expenditure plan in unison with Rio Tinto, the project operator and 34.9% shareholder in Ivanhoe.
Ivanhoe owns a 66% stake in Oyu Togloi while the Mongolian government owns the remaining 34% stake in the project.
The timeline of the capital expenditure program will be key in determining when Ivanhoe will need to tap the debt and equity markets or find an equity investor to finance the project.
Ivanhoe has announced its intention to raise up to $1 billion through a rights issue but the company hasn't set a date yet.
Ivanhoe is in the midst of an arbitration process with Rio Tinto over Ivanhoe's shareholders' rights plan, which conflicts with Rio's rights under a 2006 private placement agreement with Ivanhoe.
Analysts say the shareholder rights plan was adopted earlier this year to prevent Rio Tinto from creeping in and taking majority control of Ivanhoe.
Rio Tinto's private placement agreement with Ivanhoe allows the Anglo-Australian miner to raise its stake in the Canada-based mining company to about 46.65% and no more before 2011.
The first phase of the Oyu Tolgoi project will begin production by the end of 2012 and begin commercial production in 2013.
Oyu Tolgoi is expected to ramp up annual production to more than 450,000 metric tons of copper and 650,000 troy ounces of gold.
-By Alex MacDonald, Dow Jones Newswires; +44 20 7842 9328; alex.macdonald@dowjones.com
(END) Dow Jones Newswires
11-24-10 0937ET
For full details on Rio Tinto Plc Adr (RTP) RTP. Rio Tinto Plc Adr (RTP) has Short Term PowerRatings at TradingMarkets. Details on Rio Tinto Plc Adr (RTP) Short Term PowerRatings is available at This Link.
Andrew Harding, chief executive of Rio Tinto PLC's (RIO) copper division said "pretty much" $1 billion was spent on the Oyu Tolgoi project this year and "more than $1 billion" would likely be spent next year, although the final capital expenditure program still needs to be approved. He was speaking at the Mongolian investment summit in London.
Ivanhoe Mines Ltd. (IVN), the principal owner in the project, still needs to approve the final capital expenditure plan in unison with Rio Tinto, the project operator and 34.9% shareholder in Ivanhoe.
Ivanhoe owns a 66% stake in Oyu Togloi while the Mongolian government owns the remaining 34% stake in the project.
The timeline of the capital expenditure program will be key in determining when Ivanhoe will need to tap the debt and equity markets or find an equity investor to finance the project.
Ivanhoe has announced its intention to raise up to $1 billion through a rights issue but the company hasn't set a date yet.
Ivanhoe is in the midst of an arbitration process with Rio Tinto over Ivanhoe's shareholders' rights plan, which conflicts with Rio's rights under a 2006 private placement agreement with Ivanhoe.
Analysts say the shareholder rights plan was adopted earlier this year to prevent Rio Tinto from creeping in and taking majority control of Ivanhoe.
Rio Tinto's private placement agreement with Ivanhoe allows the Anglo-Australian miner to raise its stake in the Canada-based mining company to about 46.65% and no more before 2011.
The first phase of the Oyu Tolgoi project will begin production by the end of 2012 and begin commercial production in 2013.
Oyu Tolgoi is expected to ramp up annual production to more than 450,000 metric tons of copper and 650,000 troy ounces of gold.
-By Alex MacDonald, Dow Jones Newswires; +44 20 7842 9328; alex.macdonald@dowjones.com
(END) Dow Jones Newswires
11-24-10 0937ET
For full details on Rio Tinto Plc Adr (RTP) RTP. Rio Tinto Plc Adr (RTP) has Short Term PowerRatings at TradingMarkets. Details on Rio Tinto Plc Adr (RTP) Short Term PowerRatings is available at This Link.
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