Ivanhoe Australia slashes exploration as Rio takes larger stake

Rio Tinto has now acquired 51% of Ivanhoe Mines, as Ivanhoe's Australian subsidiary announces a massive cut in exploration.

Rio announced yesterday that it acquired the majority of the company for around US$935 million.

It bought the additional 133,571,192 common shares after Ivanhoe carried out a rights offering.

Prior to this rights offering Rio already held around 51% of the existing shares, with an option to take its holding up to 54.4%.

The miner explained that the "purpose of acquiring additional shares under Ivanhoe’s rights offering was to honour [Rio's] contractual obligations to Ivanhoe and to provide additional funding to Ivanhoe to ensure the timely development of Ivanhoe’s Oyu Tolgoi copper-gold mine in Mongolia".

As the global mine took a larger chunk of Ivanhoe, its subsidiary announced that it would slash its exploration budget in half.

According to the miner it will reduce its exploration expenditure to $15 million annually.

It explained that previously it had "an aggressive exploration effort", but will now focus on reviewing the data.

It will also look at optimising its current Osborne operations.

In May the miner announced that it was cutting around 50 jobs to save approximately $10 million.

 

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