Rio Tinto Raises Stake In Ivanhoe Mines To 48.5%

Mining company Rio Tinto PLC (RIO) Wednesday raised its ownership stake in Canada-based Ivanhoe Mines Ltd (IVN.T) by 2% to 48.5% as it sought to cement its commitment to the massive Mongolian Oyu Tolgoi copper-gold project.

Rio Tinto paid C$18.98 a share and exercised its subscription right to the tune of C$529.5 million in order to increase its take in Ivanhoe Mines, the majority owner of the Oyu Tolgoi project.

Rio Tinto has the right to increase its stake in Ivanhoe up to a maximum of 49% based on existing contract arrangements.

"Today's subscription reinforces Rio Tinto's commitment to the Oyu Tolgoi project, which is a natural fit with its strategy of focusing on cost competitive, long-life assets with significant growth potential," the company said in a statement.

Rio Tinto is Oyu Tolgoi's project developer and owns an indirect stake in the project through Ivanhoe Mines, which directly owns a 66% stake in the project. The Mongolian government owns the remaining 34%.

Oyu Tolgoi's is forecast to produce more than 650,000 ounces of gold, three million ounces of silver and 1.2 billion pounds of copper annually during the first 10 years of commercial production. The project is expected to ramp up to commercial production in the first half of 2013.

Rio Tinto said that depending upon its assessment of Ivanhoe's business, prospects and financial condition, the market for Ivanhoe's securities, general economic and tax conditions, and other factors, the Anglo-Australian miner will consider availing itself of its rights to acquire additional securities of Ivanhoe.

-By Alex MacDonald, Dow Jones Newswires; +44 (0)20 7842 9328; alex.macdonald@dowjones.com

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