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Turquoise Hill starts arbitration with Rio Tinto for clarity on Mongolia mine funding

·1 min read

Nov 4 (Reuters) - Turquoise Hill Resources Ltd said on Wednesday it was starting arbitration proceedings to clarify provisions of some arrangements with Rio Tinto, , related to additional funding for the Canadian miner's Oyu Tolgoi copper mine in Mongolia.

Rio Tinto had said in September it planned to raise up to $500 million through additional lending to develop the giant copper mine.

Rio and Turquoise Hill were to jointly pursue the debt reprofiling process by engaging with existing project finance lenders, and expected a reduction of up to $1.4 billion in funding requirements for Oyu Tolgoi.

In reprofiling, the time for repayment is extended, but the value of the debt is not marked down. Any remaining funding for the underground mine was to be met through a Turquoise Hill equity offering.

Turquoise Hill said on Wednesday that the arbitration, which is being started in British Columbia, follows recent discussions with Rio Tinto relating to the re-profiling.

The Mongolian state owns 34% in the copper project, while Rio's majority-owned Turquoise Hill has a 66% stake.

(Reporting by Shradha Singh in Bengaluru)