SailingStone Capital, the second largest shareholder in Rio Tinto- controlled Turquoise Hill (TSE, NSYE: TRQ), is expected to vote against the re-election of the Canadian miner’s board members this week, during the world’s No.2 miner annual meeting.
The San Francisco-based investor claims the four independent directors were handpicked by Rio and are not representing the interest of all investors.
SailingStone Capital, the second largest shareholder in Rio Tinto- controlled Turquoise Hill says the mining giant currently wields too much influence over the Canadian firm.
The investment group’s discontent with the way the world’s No.2 miner has handled many Oyu Tolgoi-related decisions goes back at least five years, it says.
During that time, SailingStone has accused Rio of wielding too much influence over Turquoise Hill, the Canadian miner that owns 66% of the massive Oyu Tolgoi copper-gold-silver mine in Mongolia and acts as its operator.
The US investor’s position is that Turquoise’s dropping share value and recent setbacks at Oyu Tolgoi have little to do with the risk profile of Oyu Tolgoi and Mongolia and everything to do with avoidable mismanagement, and a “failure of market confidence” in governance at Turquoise Hill.
Oyu Tolgoi was discovered in 2001 and Rio gained control of it in 2012. Once finished, the ongoing but dragged-out extension of the mine (now expected to be done in 2022) will lift production from 125–150kt in 2018 to 560kt of copper concentrate at full tilt. That would make it the biggest new copper mine to come on stream in several years.
Turquoise Hill shares are trading about half the value of 12 months ago, and were last down 2.99% in Toronto on Monday to C$1.78, which makes it market capitalization slightly over C$3.5 billion.
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