Rio Tinto has exercised its right to subscribe for and acquire additional common shares in Ivanhoe Mines for $536m.

Rio Tinto has paid $19.2 per share to acquire 27 million additional shares of Ivanhoe Mines.

With this transaction, Rio Tinto now holds a total of 358 million shares and has increased its stake from 46.2% to 48.5% in Ivanhoe Mines.

Ivanhoe Mines owns 66% of the Oyu Tolgoi copper-gold-silver project in southern Mongolia, which is under full-scale construction and is expected to begin initial production in 2012.

The subscription was made in accordance with existing contractual arrangements between Rio Tinto and Ivanhoe Mines that permit share purchases in certain circumstances and subject to certain limits.