Rio Tinto has entered into a binding Heads of Agreement with Turquoise Hill Resources for an updated funding plan for the completion of the Oyu Tolgoi Underground Project in Mongolia. The Funding Plan addresses the estimated remaining known funding requirement of approximately $2.3 billion, building on and replacing the arrangements established in the Memorandum of Understanding that Rio Tinto and TRQ previously entered into on 9 September, 2020.
Under the MoA, subject to securing approval by OT LLC and any required support from the Government of Mongolia, and subject to timing, availability, and terms and conditions being acceptable to both parties, Rio Tinto and TRQ will:
- Pursue re-profiling of principal debt repayments up to $1.4 billion with lenders under the existing project finance arrangements to better align with the revised mine plan, project timing and cash flows
- Seek to raise up to $500 million in senior supplemental debt (SSD) under the existing project financing arrangements from selected international financial institutions
Rio Tinto has committed to address any potential shortfalls from the re-profiling and additional SSD of up to $750 million by providing a senior co-lending facility on the same terms as OT’s project financing and TRQ has committed to complete a rights offering or placement of common shares for up to $500 million to satisfy any remaining funding shortfall within six months of the Co-Lending Facility becoming available.
Rio Tinto and TRQ have agreed to jointly obtain an order dismissing the current arbitration on a without prejudice basis, including an order vacating the interim measures order.