Rio Tinto to face lawsuit in US over cost overruns at Mongolian mine

A U.S. judge has accused Rio Tinto Plc of covering up delays and massive cost overruns at a Mongolian copper and gold mine owned by Turquoise Hill Resources Ltd, in which Rio Tinto has a majority stake. said it will have to face investor lawsuits accusing the Australian mining giant.

In a 134-page ruling published Tuesday, Judge Louis Lyman of the U.S. District Court in Manhattan said the fund advised by Turquoise’s largest minority shareholder, Pentwater Capital Management LP, which owns about 10% of the stock, will invest in Turquoise. said it may pursue a proposed class action lawsuit on behalf of its shareholders. From July 2018 to July 2019.

A judge has dismissed several claims against Rio Tinto and various executives, as well as all claims against Montreal-based Turquoise. His decision is dated September 2nd.

Pentwater accused Rio Tinto and Turquoise of fraudulently assuring that the $5.3 billion Oyu Tolgoi mine would be “on schedule” and “on budget.” Over budget.

Turquoise shareholders said their investment lost nearly three-quarters of its value as the truth came out. Shareholders are seeking damages from Rio to recoup their losses.

In trying to hold Chicago-based Pentwater accountable to Rio Tinto for some of Turquoise’s remarks, Liman pointed out that the two companies had a “very close relationship” and that Rio Tinto had a “strong relationship” with the mine. He cited claims that he had “almost complete control”.

“Plaintiffs fully allege that Rio knew of the delays and cost overruns shortly before the class period and, instead of correcting them or disclosing them to investors, sought to silence those who spoke out about them. claims.

Rio Tinto said Pentwater’s allegations were baseless and said it had consistently complied with its disclosure obligations.

“Pentwater’s allegations are completely baseless and we are confident that Pentwater’s allegations would be dismissed if all facts were considered by a court or, if appropriate, by a jury,” Reuters.

Turquoise and its attorneys did not immediately respond to requests for comment. Salvatore Graziano, an attorney for Pentwater, declined to comment.

Earlier this month, Rio Tinto agreed to pay around $3.3 billion for the 49% of Turquoise it does not yet own.

Turquoise owns 66% of the Oyu Tolgoi mine, the rest being owned by Mongolia.

In January, Rio Tinto and Mongolia settled a long dispute over the economic interests of the mines with a deal to forgive the Mongolian government of $2.4 billion in debt.

The case is Turquoise Hill Resources Ltd Securities Litigation, United States District Court, Southern District of New York, No. 20-08585.

Source: www.cnn.com

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