Global miner Rio Tinto Ltd
(ASX:RIO) says it will exercise warrants to purchase shares which will increase its stake in Ivanhoe Mines by 7.3% to 29.6% for US$393 million.
The miner says a series of warrants entitle Rio to around 46 million shares at US$8.54 a share, for a total consideration of US$393 million.
Rio says the funds will help Ivanhoe to continue the development of the Oyu Tolgoi copper and gold complex in Mongolia as currently scheduled.
Rio and Invanhoe are development partners for the Oyu Tolgoi project with production scheduled to commence in 2013, with a five year ramp up to full production.
If Rio Tinto were to exercise all of its remaining warrants and convert its US$350 million loan into shares it would hold a 44% stake in Ivanhoe.
Reports circulated earlier this month that Ivanhoe had been in discussions with the government of Mongolia, to try and strike an investment agreement.
Rio Tinto reported net profit after tax of $5.4 billion for the 2009 calendar year.
