Rio Tinto said it will now start developing the $4bn Oyu Tolgoi copper and gold mine in Mongolia following approval by the Mongolian Government.

According to the agreement, Mongolia’s state-owned resources company Erdenes MGL LLC will acquire a 34% stake in an Ivanhoe Mines subsidiary, Oyu Tolgoi LLC, which holds the Oyu Tolgoi mining licenses.

Ivanhoe Mines will own the remaining 66% interest in Oyu Tolgoi LLC and will develop the project with the financial and technical support of Rio Tinto.

Rio Tinto currently owns 22.4% of Ivanhoe Mines and holds options to increase that stake to 46.6% over the next 19 months.

Production is expected to begin in 2013 and the mine estimated to produce 450,000mt of copper a year, along with significant gold by-products.

Ivanhoe said a joint Ivanhoe Mines-Rio Tinto committee has approved an initial $758m to begin full-scale construction of the Oyu Tolgoi mining complex in the second quarter of 2010.

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData

Ivanhoe has already invested about $1bn in the exploration and development of Oyu Tolgoi since acquiring the exploration licenses in 2000.