Friedland Steps Down From CEO Post And Board At Ivanhoe, After Rio Tinto Deal

Ivanhoe Mines Ltd. (IVN) founder Robert Friedland resigned as chief executive and as a director of the company as part of a sweeping agreement with majority shareholder Rio Tinto PLC (RIO) that ensures Rio Tinto's support for a series of funding measures for Ivanhoe's massive Oyu Tolgoi mining project in Mongolia.

Friedland stepped down Tuesday, as did the other members of the senior management, Ivanhoe said in a statement. The move ends a months-long tussle between Friedland and mining giant Rio Tinto over control of the company. Rio Tinto has gradually increased its stake in the miner, recently taking majority control.

The company said Rio Tinto will give its full support to completion of a project-finance package of $3 billion to $4 billion to be provided by third-party lenders. Ivanhoe and Rio now aim to complete a project-finance arrangement for Oyu Tolgoi by the end of this year.

As part of the deal, Rio Tinto will provide an immediate, additional bridge-funding facility of up to $1.5 billion to help ensure that construction of the first phase of the project progresses as planned. That phase was 77.9% complete at the end of March, it noted.

Ivanhoe will go ahead with a rights offering to holders of its common shares to raise up about $1.8 billion in gross proceeds as part of the pact with Rio Tinto. The rights offering will be supported by a standby commitment for the full amount from Rio Tinto, or a member of the Rio Tinto Group.

Meanwhile, Ivanhoe has agreed to cut the size of its board by one director to 13. Seven existing directors, including Friedland, have resigned, to be replaced by six Rio Tinto nominees, four of whom are independent.

Kay Priestly, who is chief financial officer of Rio Tinto's copper group, will act as Ivanhoe's interim chief executive.

-By Carolyn King, Dow Jones Newswires; 416-306-2100; carolyn.m.king@dowjones.com

Ivanhoe Mines (NYSE:IVN)
Historical Stock Chart
From May 2024 to Jun 2024