Rio Tinto, Turquoise Hill sign funding deal on Oyu Tolgoi copper mine

Rio Tinto said it has signed a binding heads of agreement with Turquoise Hill Resources on an updated funding plan of around $2.3bn to finish the Oyu Tolgoi copper project in Mongolia.

The plan builds on and replaces an arrangement signed last September, the two companies said on Friday.

Rio and Turquoise Hill Resources will re-profile principal debt repayments up to $1.4bn with lenders under the existing project finance arrangements to better align with the revised mine plan, project timing and cash flows.

The pair will also seek to raise up to $500m in senior supplemental debt under existing financing arrangements from selected international financial institutions, while Rio has committed to address any potential shortfalls from the re-profiling and additional debt of up to $750m by providing a senior co-lending facility.

Turquoise Hill has in turn committed to complete a rights offering or placement of common shares up to $500m to satisfy any remaining funding shortfall within six months of the co-lending facility becoming available.

Oyu Tolgoi is expected to produce 480 000 tonnes of copper a year from 2028 – 2036.