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(Alliance News) - Rio Tinto PLC on Thursday said it has agreed a funding plan with Turquoise Hill Resources for the Oyu Tolgoi underground project in Mongolia.
Rio Tinto holds 51% stake in Turquoise Hill Resources.
The FTSE 100-listed miner said a memorandum of understanding reflects the parties' agreement that, subject to timing, availability and terms and conditions being acceptable to both parties.
The parties will seek to raise up to USD500 million in additional lending under the existing project financing arrangements from selected international financial institutions.
In addition, both companies 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.
Finally, Rio Tinto and Turquoise Hill Resources acknowledged 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 Turquoise Hill Resources equity offering.
"We will continue working with Turquoise Hill Resources 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," said Rio Tinto Chief Executive Of Copper & Diamonds Arnaud Soirat.
Rio Tinto shares were trading 0.3% lower in London on Thursday at 4,776.00 pence each.
By Evelina Grecenko; evelinagrecenko@alliancenews.com
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