Rio Tinto ups stake in Mongolian JV to 22.4 per cent

Anglo-Australian miner Rio Tinto Limited said it will acquire additional 15 million shares, or 2.7 per cent more in Canada's Ivanhoe Mines Ltd, increasing its stake to 98.6 million shares or 22.4 per cent.

In a statement to the Australian Stock Exchange (ASX), Rio Tinto said the shares in the Canadian company will cost C$16.31 per share, aggregating to C$244.7 million ($233.7 million).

Under the deal, Rio Tinto and Ivanhoe are planning to jointly develop Oyu Tolgoi mines in Mongolia's Gobi desert, thought to be one of the world's largest untapped copper and gold deposits.

Mongolia with a population of just 2.6 million is a mineral rich country holding the world's largest undeveloped copper and coking coal reserves. It also has huge deposits of untapped uranium, gold, phosphorus and fluorspar as well as rare earth metals.

Nearly half of the gross industrial output and 60 per cent of the country's export earning come from the mining sector.

The company said it can increase its holding in Ivanhoe to about 44 per cent by converting a $350 million loan into stock and exercising all its share purchase warrants.