Seeking Alpha

Mongolia considering IPO of its stake in Rio Tinto mine

  • The government of Mongolia is studying converting its 34% stake in the Oyu Tolgoi copper and gold mine into a public company.
  • By giving a stake to Mongolian citizens who have complained that the project only benefits foreign investors, the government likely would find it easier to negotiate with partner Rio Tinto (RIO +3.4%).
  • Rio, which controls 66% of the mine through its majority stake in Turquoise Hill Resources (TRQ +0.2%), started shipments from the mine last month following delays as Mongolia sought to ensure revenue passed through domestic banks.
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Comments (2)
  • marpy
    , contributor
    Comments (1104) | Send Message
    Because of the Government of Mongolia,s actions, the mine has so far benefited no one. The GOM and Tinto have a signed investment agreement that leaves over 70% of proceeds from this to Mongolia and Mongolians yet the GOM keeps looking for more and keeps bringing issues to the table. The biggest obstacle to this mine benefiting all the stakeholders and especially the people of Mongolia is the GOM.
    9 Aug 2013, 01:10 PM Reply Like
  • healthpicker
    , contributor
    Comments (1048) | Send Message
    If GOM is going to float its stake that should take them out of direct interference with the management and operation of the mine.
    However I don't know the value of the transaction but where would all these Mongolians get the money from to invest in an IPO?
    9 Aug 2013, 06:38 PM Reply Like
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