Ivanhoe Will Not Sell Its Stale In OT, Says Friedland

Ivanhoe Mines is looking at various options to fund its development of the Oyu Tolgoi project, but will not sell a stake in the project itself, Executive Chairman Robert Friedland has said. Speaking at a special session on Mongolia at Asia Mining Congress 2010 in Singapore, Mr. Friedland said both Ivanhoe and the Mongolian Government, which owns 34% in the project, have the first right of refusal if either party wants to sell a stake.
With both sides unlikely to sell their stake in the mine, “the only way for anyone to participate (in Oyu Tolgoi) is to become a shareholder of Ivanhoe, and we like it that way” he said. Asked if China Aluminum Corp., or Chinalco, is in negotiations to buy a stake in Ivanhoe, Mr. Friedland said every mining company “is sniffing around” for opportunities, but he would not comment on interest from any specific company.
He said the only three companies technically capable of undertaking such a large project as Oyu Tolgoi are Rio Tinto, Chile's Corporacion Nacional del Cobre, or Codelco, and Freeport-McMoRan Copper & Gold Inc. Rio Tinto, the technical operator of the project, already has a 22.4% stake in Ivanhoe and has an option to take it up to 46.6% eventually. Chinalco, which holds around 9% of Rio Tinto, is currently the single largest shareholder in the Anglo-Australian miner.
Mr. Friedland said Ivanhoe has budgeted to spend USD758 million on the construction of the Oyu Tolgoi mine in 2010 alone. It has appointed Citigroup Inc. and Hatch Corporate Finance to explore funding options. Mongolia's gold production is expected to rise 300% and copper production will also rise significantly in the next five years as a result of the new project, he said.
Source: Dow Jones Newswires
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