Rio Tinto, the world's second-largest mining giant, announced on Monday that it plans to buy a 49% stake in Canadian mining company turquoise mountain resources (Turquoise Hill Resources) for $2.7 billion. If the acquisition is successful, Rio Tinto will gain more control over Mongolia's Oyu Tolgoi copper and gold mine.
It is reported that Rio Tinto's offer of C $34 (US $26.60) per share is 32% higher than the closing price of turquoise mountain on Friday. Rio Tinto revealed that it had not yet reached any agreement with turquoise Mountain.
Jakob Stausholm, chief executive of Rio Tinto, said: "the proposed deal will enable Rio to work directly with the Mongolian government to advance the Oyu Tolgoi project with a simpler and more effective ownership and governance structure."
Turquoise mountain owns 66 per cent of the Oyu Tolgoi project, while Rio Tinto currently owns 51 per cent of turquoise Castle Peak.
Earlier this year, Rio Tinto reached an agreement with the Mongolian government to restart the long-delayed Oyu Tolgoi underground expansion project worth $6.9 billion after agreeing to cancel the Mongolian government's $2.4 billion debt.
Analysts believe that for all Green Pine Castle Peak shareholders, the potential deal comes at a time when copper prices are high and Rio Tinto has reached an underground expansion agreement with the Mongolian government for Oyu Tolgoi. As a result, Rio Tinto's acquisition of the remaining stake in Green Pine Castle Hill is more successful.
As the process of global energy transformation accelerates, it is a general trend to acquire mines that can produce green metals to replace fossil fuel assets. Rio Tinto agreed in December to buy a lithium mine in Argentina for $825 million, while rival BHP Billiton acquired a stake in a nickel project in Tanzania earlier this year.
