Rio to provide $US600m for Oyu Tolgoi

Mining giant Rio Tinto will provide its subsidiary Turquoise Hill Resources with a $US600 million financing package to fund the continued development of the Oyu Tolgoi copper-gold mine in Mongolia.

Rio announced the bridge funding facility today, which has a maturation date of December 31.

The funds will initially be used to refinance a $US 225 million short-term funding facility Rio provided Turqoise Hill in June, as well as a continued ramp-up of the first stage of the mine’s underground development.

The short-term facility will be extended until August 28, and funds repaid by Turqoise Hill from the sale of its 50 per cent stake in Altynalmas Gold to be redrawn.

“Rio Tinto remains committed to putting in place a significant project financing package to fund the development of the Oyu Tolgoi underground mine,” Rio said in a statement.

Late last month Turquoise Hill, which was formerly known as Ivanhoe Resources and is a subsidiary of Rio Tinto, said delays were expected for the underground expansion of the Oyu Tolgoi mine due to Mongolian government financing processes.

The final cost for the development has been estimated at around $US6.2 billion.

Turqoise Hill holds a 66 per cent stake in the Oyu Tolgoi mine, with the remainder held by Rio.