Rumours about an acquisition are reasonable because a single owner of the asset would find it much easier to negotiate with the government. It would also make sense for Rio to own Turquoise Hill outright rather than share its spoils with unrelated shareholders, who are already at the mercy of Rio anyway.
However, Rio’s desire to buy out other shareholders in Turquoise Hill, including founder Robert Friedman, puts it in a difficult position. The ideal timing would be to make an offer as soon as possible after the second phase is authorized. “The longer they leave it, the higher the price they're going to pay,” Hamilton said.
So why hasn’t Rio done anything? The truth is that it is stuck. The second phase cannot start until it is authorised by the government and the government says it won’t do that without a feasibility study that Turquoise Hill says won’t be ready until the summer. Meanwhile, the project’s $4 billion syndicated financing expires on March 31 and cannot be released until the authorisation comes through.