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Allens acts on Rio's new peace deal
Allens Arthur Robinson has advised Rio Tinto on an agreement to assume direct management of the Oyu Tolgoi copper-gold project in Mongolia.
The New Lawyer
ALLENS Arthur Robinson has advised Rio Tinto on an agreement to assume direct management of the Oyu Tolgoi copper-gold project in Mongolia.
Rio Tinto backed away from making a messy takeover bid for Asia Pacific-focused international mining company Ivanhoe Mines before the deal, moving instead to strike a peace deal that increased its influence on the $US6 billion development of Ivanhoe's Oyu Tolgoi copper-gold project.
The deal halts previous hostilities between the two companies over the potential for Rio to creep up from its current 34.8 per cent Ivanhoe shareholding to a control position without paying a premium.
The agreement allows Rio Tinto to assume management of the project (subject to approval by the board of Oyu Tolgoi LLC) and increase its ownership in Ivanhoe Mines by 7.4 per cent, to a total of 49 per cent. In return it is handed an additional $US2.5 billion of top of the $US1.7 billion it has invested to date, plus an undertaking to provide Ivanhoe with $US1.8 billion in interim financing.
Rio, in return, has agreed to not to go beyond a 49 per cent shareholding until January 18, 2012 - a three-month extension on the original agreement struck between the two companies in 2006, The Sydney Morning Herald reports.
Under the new agreement, Rio will deliver an interim loan facility, aimed at shaving six months off the Oyu Tolgoi project's original completion date. It is anticipated that the mine will now be operational by late 2012, Allens said in a statement.
Partner Nic Tolé led the Allens team.
Earlier this week, Allens advised Rio Tinto on the extension of its historic Channar Mining joint venture with Chinese State-owned metals trading house Sinosteel Corporation, and its separate non-binding Memorandum of Understanding with Aluminum Corporation of China to establish a landmark exploration joint venture in China.
