Rio Tinto PLC (LSE:RIO) said it agreed to provide up to US$400mln in interim debt funding to Turquoise Hill Resources Ltd (TSX:TRQ), the developer of the Oyu Tolgoi copper-gold mine in Mongolia.
In March, Rio Tinto announced a US$2.7bn offer to buy the 49% interest it does not already hold in Canada’s Turquoise Hill Resources with the aim of moving the Oyu Tolgoi copper project forward.
READ: Rio Tinto makes US$2.7bn offer for Turquoise Hill to move Mongolian copper project forward
The revised funding arrangements announced today will provide financing while Turquoise Hill evaluates Rio Tinto’s offer and will fund the ongoing development of the Oyu Tolgoi underground project.
Oyu Tolgoi, which is one of the world’s largest copper and gold deposits, is 66% owned by Turquoise Hill, with the Mongolian government holding the remaining shares. The project has seen significant delays since construction began in 2019.
Rio Tinto said its interim funding will be available at any time up to end-December, 2022.
The deadline in the previously agreed funding plan for Turquoise Hill to conduct an initial equity offering of at least US$650mln has also been extended from the end of August 2022 to the end of 2022, Rio Tinto said.
Oyu Tolgoi has the potential to operate for about 100 years from five known mineralized deposits.