Rio Tinto Limited
(ASX:RIO) says financing of the Oyu Tolgoi expansion in Mongolia has been delayed indefinitely.
The global mining giant says ongoing negotiations with the Mongolian Government remained unresolved, meaning that its effort to raise $US4 billion for the second stage of the mine could not be completed in the near term.
The Rio subsidiary in charge of the project - Turquoise Hill Resources - will now undertake a rights issue to sustain itself, and Rio will extend a bridging loan out to January.
Rio will underwrite the rights issue, meaning it is likely to increase its stake in Turquoise Hill and therefore the giant copper and gold mine.
The second stage of the project has been caught up in dispute for some time, with Mongolia wanting a bigger slice of the wealth from the mine, and expressing concerns with the costs that Rio incurred while building the first stage.
Rio Tinto delivered a net profit of $1.8 billion in the first half of fiscal 2013.
