Rio Tinto in $2.7 billion bid for full control of ‘one of world’s largest’ copper mines

Rio Tinto has made a $2.7 billion (£2.1 billion) bid to take full control of a vital copper mine project in Mongolia.

The FTSE 100 mining giant has tabled an offer to buy the rest of its important Turquoise Hill subsidiary. If successful, the bid would give Rio sole responsibility for the Oyu Tolgoi project in Mongolia, which is expected to be one of the biggest copper mines in the world once it reaches full capacity in 2028.

Rio CEO Jakob Stausholm said this deal would “simplify the ownership structure” of the mine and “further strengthen Rio Tinto’s copper portfolio”, something seen as increasingly compelling given the metal’s importance in developing cleaner energy sources.

Major disputes linked to the project had caused progress to almost stall entirely, with costs hitting $6.9 billion — well over its $5.3 billion budget.

But Stausholm, who has held the role for little over a year, helped oversee an agreement by Turquoise Hill to write off $2.4 billion of debt that Mongolia had agreed to pay back out of its share of the mine’s profits.

“With our relationship reset and the underground operations commenced, this transaction demonstrates our clear and unequivocal long-term commitment to Mongolia,” Stausholm said.

The value of the bid is 32% higher than Turquoise Hill’s last closing share price on the Toronto Stock Exchange, meaning the latter firm’s shareholders would receive CA$34 (£20) per share if the deal goes ahead.

Oyu Tolgoi is one of four major projects Stausholm is eager to move forward. Rio’s $2.4 billion Jadar lithium project suffered a major blow after Serbia revoked Rio’s licences to mine.

In Guinea, the firm is trying to make progress on its iron ore mine with new ruler Col Mamady Doumbouya, while in Arizona President Biden reversed a decision by Donald Trump clearing the way for its copper mine.