Published: April 12, 2021 |

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Rio Tinto has entered into a binding heads of agreement (HoA) with Turquoise Hill Resources (TRQ) for an updated funding plan for the completion of the Oyu Tolgoi (OT) underground project in Mongolia. The funding plan addresses the estimated remaining known funding requirement of approximately $2.3 billion, building on and replacing the arrangements established in the memorandum of understanding that Rio Tinto and TRQ previously entered into on September 9, 2020.

Rio Tinto and TRQ will:

• Pursue re-profiling of principal debt repayments up to $1.4 billion with lenders under the existing project finance arrangements to better align with the revised mine plan, project timing and cash flows;

• Seek to raise up to $500 million in senior supplemental debt (SSD) under the existing project financing arrangements from selected international financial institutions;
 
• Rio Tinto has committed to address any potential shortfalls from the re-profiling and additional SSD of up to $750 million by providing a senior co-lending facility on the same terms as OT’s project financing
 
• TRQ has committed to complete a rights offering or placement of common shares for up to $500 million to satisfy any remaining funding shortfall within six months of the co-lending facility becoming available

“This agreement and alignment with TRQ represents a major milestone in the continued development of Oyu Tolgoi, which is expected to become one of the world’s largest copper mines and a significant contributor to the Mongolian economy for years to come. Commencing the re-profiling whilst concurrently listening, engaging and resolving the concerns of the Government of Mongolia are critical steps to maintaining momentum on the timely delivery of the Oyu Tolgoi Underground Project,” said Rio Tinto Copper Chief Executive, Bold Baatar.

“We are pleased to have reached a constructive and equitable agreement with Rio Tinto to fund the Oyu Tolgoi underground development,” said Steve Thibeault, interim chief executive officer of Turquoise Hill.

“With a binding funding agreement now in place that sets out a process along a known timeline, we will be able to move ahead as expeditiously as possible with the development of the underground project at Oyu Tolgoi. We remain committed to continue delivering a benefit to all stakeholders, including Mongolia and its citizens, and to delivering significant long-term value for TRQ as this project progresses,” added Thibeault.

About Rio Tinto
Rio Tinto provides work for more than 19,000 people in Canada and the United States, producing aluminium, boron, copper, diamonds, iron ore and titanium. They operate in Quebec, Labrador Newfoundland, British Columbia and the Northwest Territories in Canada, and Utah, California, Arizona and Illinois in the United States. Their office in Montreal is a global hub for Rio Tinto that supports operations around the world and its commercial center in Chicago connects them with customers in the key market of the United States.

To stop by Rio Tinto’s website, CLICK HERE

About Turquoise Hill Resources
Turquoise Hill Resources is an international mining company whose primary operation is its 66 percent interest in the Oyu Tolgoi copper-gold-silver mine in southern Mongolia.

To stop by Turquoise Hill Resources’ website, CLICK HERE

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