By Joe Hoppe


Rio Tinto PLC said Thursday that it and Turquoise Hill Resources Ltd. have entered a memorandum of understanding to provide funding for its Mongolian copper project, and will seek up to $500 million.

The mining giant said the memorandum will progress the completion of the Oyu Tolgoi Underground Project in Mongolia, set to be one of the largest copper mines in the world. It will re-profile principal debt repayments with lenders under existing project finance arrangements into ones that better match with the revised mine plans, and raise up to $500 million in additional lending from certain international financiers, it said.

Turquoise Hill will continue to explore other options for additional funding, which Rio will consider, the company said. However, Rio said it doesn't presently support or consent to any additional debt or other sources of funding, and both parties acknowledge any balance of funding will need to be met through a Turquoise Hill equity offering.

"We will continue working with Turquoise Hill 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," Rio Tinto Chief Executive of Copper and Diamonds Arnaud Soirat said.

Shares at 1231 GMT were down 20 pence, or 0.4%, at 4770 pence.


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(END) Dow Jones Newswires

September 10, 2020 08:52 ET (12:52 GMT)

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