Rio Tinto and Turquoise Hill Resources (TRQ) have entered into a memorandum of understanding (MoU), which provides a clear pathway to progress the financing for completion of the Oyu Tolgoi Underground Project in Mongolia and address TRQ’s funding position.
The MoU reflects the parties’ agreement that, subject to timing, availability and terms and conditions being acceptable to both parties, they will:
- Pursue re-profiling of principal debt repayments 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 US$500 million in additional lending under the existing project financing arrangements from selected international financial institutions.
- While TRQ continues to explore other options for additional debt funding, which Rio Tinto will consider, Rio Tinto has advised TRQ that it does not currently support or expect to consent to any additional debt or other sources of funding. Rio Tinto and TRQ acknowledge that any balance of the funding required for Oyu Tolgoi to achieve completion of the underground mine will need to be met by way of a TRQ equity offering.
Rio Tinto Chief Executive of Copper and Diamonds, Arnaud Soirat, said: “The MoU agreed with TRQ provides a clear funding pathway for the completion of the Oyu Tolgoi Underground Project. We will continue working with TRQ and the government of Mongolia to progress the underground project, which has the potential to unlock the most valuable part of the mine for the benefit of all stakeholders.”
Read the article online at: https://www.globalminingreview.com/finance-business/11092020/rio-tinto-and-turquoise-hill-resources-agree-funding-plan-for-oyu-tolgoi/