DOW JONES NEWSWIRES
Rio Tinto PLC (RIO.LN, RTP) said it would exercise warrants to
purchase shares of Ivanhoe Mines Ltd. (IVN, IVN.T), boosting its
stake to 30% for about $393 million.
Rio holds a 22% stake in the miner of Mongolian copper and gold
deposits. It could take a stake of up to 44% if it exercises all
its warrants and converts a $350 million load into shares.
The warrants exercised Tuesday entitle Rio Tinto to acquire 46
million shares at a subscription price of $8.54 a share.
The two companies are partners in the Oyu Tolgoi mining project
in Mongolia. Tuesday, Rio Tinto said output should begin in 2013
with five years following to ramp up to full production.
Earlier this month, reports surfaced that Ivanhoe has been
negotiating with the Mongolian government in hope of reaching an
investment agreement. In 2006, Mongolia said it would seek stakes
of up to 50% in strategic mining projects, in addition to a
windfall tax on company profits from copper and gold output.
Ivanhoe's U.S.-traded shares were down 0.6% at $13.27 after
hours, as Rio Tinto's were down 0.4% at $45.25. While Ivanhoe's
stock has more than doubled in the last year, Rio's has risen only
modestly, underperforming the market at large.
-By Joan E. Solsman, Dow Jones Newswires; 212-416-2291;
joan.solsman@dowjones.com