Rio is reviewing Ivanhoe’s management though it has no “current plan to make any change in the present board of directors or management,” London-based Rio said in a filing. “The Rio Tinto companies anticipate that they will, in the future, seek the replacement of some of the management, including senior management, of the company and at least a majority of the non-Rio Tinto appointed directors.”
Rio this week said it bought C$302 million ($301 million) of stock in Ivanhoe, the owner of the $6 billion Oyu Tolgoi copper and gold mine in Mongolia, paying C$20 apiece for 15.1 million shares. It said at the time that it had no “current intention” of buying more stock.
“Rio is looking to do small, incremental steps with Ivanhoe and putting your men on the board is probably the next natural progression,” Chris Weston, institutional dealer at IG Markets in Melbourne said by phone. “It would make a lot of sense to put your own people in place in a company where you’ve gained control.”
Rio Tinto rose 2.1 percent to A$69.78 at the close of Sydney trading, compared with a 0.4 percent rise in the benchmark S&P/ASX 200 Index.
Construction of Oyu Tolgoi is 70 percent complete and commercial production is due to start in the first half of 2013, Rio said this week.
Ivanhoe owns 66 percent of Oyu Tolgoi, which is located 80 kilometers (50 miles) north of Mongolia’s border with China. The project will be one of the world’s five biggest copper mines, according to Rio, (RIO) which is managing its development.
To contact the reporter on this story: Elisabeth Behrmann in Sydney at email@example.com
To contact the editor responsible for this story: Rebecca Keenan at firstname.lastname@example.org