Rio Tinto and Ivanhoe reach deal on Mongolia mine

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Anglo-Australian miner Rio Tinto and Canada's Ivanhoe Mines said Wednesday they had reached agreement on the joint development of the Oyu Tolgoi copper and gold project in Mongolia.

The agreement, which ends a dispute between the two companies dating to 2006, will also see Rio Tinto increasing its stake in Ivanhoe to 49 percent by January 2012.

The deal will see Rio Tinto assume direct managment of the Oyu Tolgoi project and should ensure production begins six months ahead of schedule in late 2012, the companies said in a statement.

"Today's agreement reinforces our commitment to the Oyu Tolgoi project, which is a natural fit with our strategy of focusing on low-cost, long-life assets with significant growth potential," said Rio Tinto Copper chief executive Andrew Harding.

The Oyu Tolgoi project, about 80 kilometres (50 miles) from the Chinese border, is expected to produce 450,000 tonnes of copper and 330,000 ounces of gold annually over 35 years.

© 2010 AFP

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