Rio Tinto CEO Jakob Stausholm said the company’s takeover of Canadian miner Turquoise Hill will simplify governance of Mongolia’s Oyu Tolgoi mine.

Rio Tinto CEO Jakob Stausholm said the company’s takeover of Canadian miner Turquoise Hill will simplify governance of Mongolia’s Oyu Tolgoi mine.

Rio Tinto chief executive Jakob Stausholm said the deal will simplify governance and create greater certainty of funding for future of the Oyu Tolgoi project,which it currently operates.

“Rio Tinto is committed to moving Oyu Tolgoi forward in direct partnership with the Government of Mongolia to realise its full potential for all stakeholders,” he said.

The purchase price of C$43 per share is 19 per cent higher than the Canadian miner’s share price at last close,and Rio Tinto said the price is the company’s “best and final offer” afterits previous offers to buy the company at C$34 per share were rejected.

The takeover has the unanimous approval of the Turquoise Hill board special committee but will need to be confirmed by a two-thirds majority of Turquoise Hill shareholders and a simple majority of votes cast by minority shareholders.

Shareholders are expected to meet to approve the takeover bid as early as the fourth quarter of 2022. If approved,Rio Tinto expects to finalise the takeover shortly thereafter.

Rio Tinto Copper chief executive Bold Baatar said the deal represented good value for those with minority shares in the Canadian company.

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“Turquoise Hill minority shareholders will realise a significant and immediate cash premium for their shares
at a time when uncertainties inherent in the development of the underground operations remain,” he said.

Rio Tinto first launched its bid to assume full ownership of the Canadian company in March,and had already made a sweetened offer of $C40 per share before today’s announcement.

Iron ore dropped below $100 a tonne this week on signs that the crisis in China’s steel industry is worsening.

Rio Tintoreported a 30 per cent drop in underlying earnings last month,sharply reducing its interim dividend to $US2.67 a share - well below the $US3.05 that most analysts had been expecting.

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