Rio may push for shake-up of Ivanhoe Mines
(Reuters) - Rio Tinto RIO.L RIO.AX has opened the door to a shakeup of the board and senior management of Ivanhoe Mines IVN.TO now that it has taken control of the Canadian miner, which owns two-thirds of the massive Oyu Tolgoi project in Mongolia.
In a filing with the U.S. Securities and Exchange Commission, Rio said it would look to gain more seats on the Ivanhoe board and that it anticipates replacing of some of the management, including senior management.
But Ivanhoe's deputy chairman was quick to highlight a 2010 agreement that he said guarantees more than 50 percent of Ivanhoe's board must remain independent, meaning Rio could not gain a majority on the board. All management appointments are made by the board.
Rio Tinto, which boosted its stake in Ivanhoe to 51 percent earlier this week, also said it may also approach Ivanhoe - alone or with a third party - on the ownership structure of the Oyu Tolgoi copper-gold mine.
Rio said it has no plan for changes to the board or management at this time but said it is reviewing the matter. The SEC filing sheds more light on Rio Tinto's intentions for Ivanhoe.
The Anglo-Australian miner, scarred by the costly takeover of aluminum giant Alcan at the height of the commodities boom, is not expected to try for a full takeover of Ivanhoe.
Instead, analysts say, it will likely seek a friendly deal that would give it control of Oyu Tolgoi but leave behind Ivanhoe's other projects. Oyu Tolgoi, one of the world's biggest mining projects, is due to start producing within 18 months.
The mine is 34 percent owned by the government of Mongolia, with Ivanhoe owning the rest.
In 2010, Rio said that it had held talks with its biggest shareholder, Chinalco, about the possibility of bringing in the Chinese state-owned company as a partner in Oyu Tolgoi, a move that would have to be approved by the Mongolian government. Continued...