2nd UPDATE: Rio Tinto Eyes Shakeup Of Ivanhoe, Oyu Tolgoi Stake
January 27 2012 - 11:11AM
Dow Jones News
Rio Tinto PLC (RIO) expects to replace some directors and
management at Ivanhoe Mines Ltd. (IVN) after grabbing majority
control of the Canadian mining company, and may seek direct
ownership in the massive Oyu Tolgoi copper and gold project in
Mongolia.
The Anglo-Australian mining company doesn't currently have any
plans to shake up Ivanhoe, but is reviewing its investment in the
company and anticipates replacing some of the management and at
least a majority of the non-Rio appointed directors, according to a
filing Thursday to the U.S. Securities and Exchange Commission. The
change will give Rio more than a majority on the Ivanhoe board, it
said.
Rio reserved the right to increase its holding in Ivanhoe as
well as the right to make proposals "alone or with a third-party"
regarding Ivanhoe's existing investment, ownership in Oyu Tolgoi or
other changes, the filing added.
Rio earlier this week said it has bought an additional 15.1
million shares of Ivanhoe, increasing its interest to 51% from 49%
at a cost of C$302 million ($301 million). It said it has no
current plans to buy more shares.
A spokesman for Ivanhoe said the filing to the SEC was made by
Rio. The company, in a statement responding to the filing, said it
expected its 14-member board to maintain a majority of independent
directors.
Ivanhoe said that Rio as part of a 2010 pact agreed that at
least eight directors would be independent until either Jan. 18,
2014, or if Ivanhoe ceases to be a Canadian public company.
Deputy Chairman Peter Meredith in the statement also said the
composition of Ivanhoe's management team is a board
responsibility.
Ivanhoe owns 66% and Mongolia's government the remaining 34% of
Oyu Tolgoi, which is expected to be one of the world's largest
mines when fully operational. Annual output in the first 10 years
is projected to average 1.2 billion pounds of copper, 650,000 troy
ounces of gold and more than 3 million ounces of silver.
Rio is operator of the project, which is due to begin commercial
production in the middle of 2013. Rio has steadily increased its
holding in Ivanhoe over the past two years, and effectively
controls the Vancouver-based company's board, with three employees
and four nominees among the 14 directors.
-By Robb M. Stewart, Dow Jones Newswires; +61 3 9292 2094;
robb.stewart@dowjones.com
Ivanhoe Mines (NYSE:IVN)
Historical Stock Chart
From Jun 2024 to Jul 2024
Ivanhoe Mines (NYSE:IVN)
Historical Stock Chart
From Jul 2023 to Jul 2024