Rio Tinto pays $213m to settle Mongolian mine lawsuit
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The news: Rio Tinto agreed to pay USD138.75 million ($213.65 million) to settle a lawsuit that claimed the mining giant defrauded investors by withholding information on cost increases and delays at the Mongolia Oyu Tolgoi copper and gold mine.
The numbers: At 11:37am AEST Rio Tinto's share price had slipped 1.4% to $104.50.
The context: The lawsuit was seeking damages on behalf of the shareholders of Montreal-based Turquoise Hill Resources which was majority-owned by Rio Tinto between July 2018 and July 2019.
Rio Tinto told investors in October 2018 that a planned USD5.3 billion expansion of the Oyu Tolgoi mine was running within budget and on time. The company later announced to the ASX in July 2019 that it had blown out by between USD1.2 billion and USD1.9 billion and would be delayed by 16 to 30 months.
The preliminary settlement of the proposed class action was filed in the US District Court in Manhattan and is awaiting the judge’s approval.
The settlement also resolves claims against former Rio Tinto chief executive Jean-Sébastian Jacques who left in March 2021.
Rio Tinto is also facing a bribery lawsuit filed by the Mongolian government in the UK High Court for allegedly targeting at least two local politicians between 2008 and 2012.
The sources: Reuters, The Australian, The Australian Financial Review
