How is Rio Tinto progressing? A snapshot of latest developments

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  • Rio Tinto (ASX:RIO) has entered into an agreement with Turquoise Hill for the development of the Oyu Tolgoi mine.
  • The miner has also increased the 2021 exploration budget and its stakes in the Citadel project.
  • Rio has achieved battery-grade lithium production from a demonstration plant located at California's Boron mine.

Rio Tinto (ASX: RIO) is one of the world’s leading metals and mining giants with its headquarters in London and Melbourne. The company has its operations in over six continents with special focus on Canada and Australia. Iron ore and copper are the primary sources of earnings of the world's second-largest miner, but it is not limited to this; the company also deals with the extraction of aluminium, coal, uranium etc.

With its vast projects and operations spread across the globe, it becomes difficult for the company's followers to keep a track of all the recent developments of the company. Let us have a brief look at the latest updates of the mining giant.

Binding Head of Agreement (HoA) with Turquoise Hill Resources at Oyu Tolgoi:

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As per Rio’s latest media release on 9 April 2021, it has entered into an agreement with Turquoise Hill Resources, which aligns with the company’s US$2.3 billion financial plan for the development of the Oyu Tolgoi mine located in Mongolia.

Oyu Tolgoi is claimed as the world’s largest new copper-gold mine, located in the Gobi region of Mongolia. The project is operated via a joint venture with Rio’s subsidiary, Turquoise Hill, having 66 per cent stake and the remaining 34 per cent stake held by the Mongolian government.

Interesting Read: FMG, BHP, and RIO Fly High on Soaring Iron Ore Prices

Both the partners, Rio and Turquoise, are facing trouble over the underground expansion of the mine due to the cost overrun of US$1.4 billion by Rio on accounts of complex geology.

Under the current agreement, both partners have agreed to restructure the principal debt repayments up to US$1.4bn with lenders. The parties have also agreed to raise US$500 million under senior supplemental debt (SSD. Additionally, Rio has also committed to providing up to US$750 million through a co-lending facility.

Increased Budget in Citadel copper-gold project:

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The miner has been heavily investing in copper projects for the past two years on the hopes of surging copper demands amid the rising craze for electric vehicles and the construction of bigger power grids across the globe, which will create a deficit for the red metal.

In line with the same, Rio has increased the 2021 exploration budget for the Citadel project. Located in Paterson Province of WA, Citadel is a JV gold-copper project between Rio and Antipa Minerals (ASX: AZY).

The miner has also increased its stake into the project from 51 per cent to 65 per cent and the exploration budget from US$13.8 million to US$24.5 million.

The project contains a mineral resource of 63.8Mt @ 0.8 g/t Au and 0.2% Cu for 1.6Moz of gold and 127,000t of copper.

Battery Grade Lithium at Boron Plant:

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It seems like the miner is taking a serious note of the battery boom. In the recent media release on 8 April 2021, the miner confirmed that it had achieved battery-grade lithium production from a demonstration plant located at California's Boron mine.

Good Read: Rio Tinto Kicks Off Lithium Production from Waste Rocks at US Site   

On 12 April, another lithium player, Galaxy Resources (ASX: GXY) climbed more than 10 per cent on the release of its projects' updates. Pilbara Minerals Limited (ASX: PLS), Orocobre Limited (ASX: ORE), Mineral Resources (ASX: MIN), Syrah (ASX: SYH) and Galan (ASX: GLN) are also gaining traction amid rising lithium demands due to the electric vehicle revolution.

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