UPDATE: Ivanhoe: Working To Satisfy Remaining Oyu Tolgoi Conditions

Ivanhoe Mines (IVN.T) and Rio Tinto (RIO.AU) are working to satisfy the remaining conditions set out in an investment agreement with the Mongolian government for the Oyu Tolgoi copper-gold project, Ivanhoe CEO Robert Friedland said Thursday at a mining conference.

The agreement is subject to conditions that must be met by April 6, including the completion of a feasibility study currently under way. Ivanhoe and Rio Tinto have satisfied 7 of 10 conditions so far and are "working hard" to satisfy the rest, Friedland said.

Friedland praised Mongolia as an investment destination and described the current Prime Minister, Sukhbaataryn Batbold, as a "great visionary."

The operators of the Oyu Tolgoi project would leverage Rio Tinto's experience in helping to develop the Escondida mine in Chile and the Grasberg mine in Indonesia, two projects which Oyu Tolgoi would come to be compared with, he said.

"The mining industry has not built an enormous mine like this in 25 years and there have been enormous improvements in technology during that period," Friedland said.

The budget for construction of the project was $758 million this year, doubling to around $1.5 billion in both 2011 and 2012, he said.

At current prices, there is about $300 billion-$350 billion dollars worth of copper, gold and other metals "in situ," he said.

"I believe this will ultimately be a tiny fraction of what's there."

Ivanhoe and Rio struck a long-awaited investment agreement with the Mongolian government in October last year, under which the government will take a 34% stake in the project.

Friedland was also bullish on the company's coal prospects in Mongolia, describing the Ovuut Tolgoi coal project, being developed by its subsidiary SouthGobi Energy Resources, also in Mongolia, as containing the "beluga caviar" of coal.

-By James Campbell, Dow Jones Newswires, +65 6415 4082; james.campbell@dowjones.com

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