TORONTO (miningweekly.com) – London-based Rio Tinto wasted little time in lifting its Ivanhoe Mines stake to a 51% majority one on Tuesday, less than a week after an agreement that prevented it from doing so expired.

Last week, Ivanhoe, the 66% owner of the mammoth Oyu Tolgoi copper-gold venture in Mongolia, said it would not exercise a shareholder rights plan that Rio Tinto gaining control would otherwise have triggered.

Rio Tinto Copper chief executive Andrew Harding said the company moved to secure control of Ivanhoe as Oyu Tolgoi edged past the 70% completion mark.

“The lead-up to first ore in the second half of 2012 will mark an important milestone in the path towards commercial production of copper concentrate, slated for the first half of 2013,” he commented in a news release.

While analysts expected Rio Tinto to attain ownership control of Ivanhoe, it did so even more quickly than anticipated.

The diversified mining giant said it bought the additional 2% from two sellers off the market for C$302-million, or an average C$20 a share.

“Rio Tinto has no current intention to purchase additional securities of Ivanhoe,” the company said, though it added that it had the right to “seek opportunities to purchase additional securities” in the future.

The company also asserted its position as Ivanhoe’s new majority owner: “Rio Tinto also reserves its right to take any permitted action as the majority shareholder of Ivanhoe.”

The move follows an often tense relationship between Rio Tinto and Ivanhoe CEO Robert Friedland, who is said to be planning to list his platinum and base-metals venture Ivanplats in Toronto and London.

After Ivanhoe said it would scrap its shareholder rights plan last week, TSO & Associates analyst Terence Ortslan said Rio Tinto would likely seek to buy out Ivanhoe outright at some point.

"One thing is for sure, Rio can choose their time to do this," he said in an interview. Once it has acquired a majority stake, it is not likely there will be any companies competing for ownership of the remainder.

Another anlayst, who asked to remain anonymous, on Tuesday told Mining Weekly Online that Rio Tinto gaining majority ownership of Ivanhoe "practicality speaking, doesn’t change too much".

“In all likelihood they’ll end up striking a deal with Robert (Friedland) that will see Rio directly owning Oyu Tolgoi and the minority shareholders getting Ivanhoe’s other assets,” the Toronto-based analyst said.

An Ivanhoe spokesperson declined to comment.

The analyst added that it was a "possibility at some point down the road" that Rio Tinto could seek to use its majority ownership to remove Friedland as CEO if the company could not strike a suitable deal with him.

A source close to Rio Tinto said that the company would not likely propose any board restructuring at Ivanhoe until closer to the junior's annual shareholder's meeting in May.

VOTING SHARES

A spokesperson for the Anglo-Australian miner said this was a possibility: "We may in the future vet our shares to change the Ivanhoe board," he said.

Friedland, who has a 14% stake in Ivanhoe, is notorious in the mining industry for being a hard negotiator, and has bumped heads with Rio Tinto on numerous occasions since the giant became a major shareholder in the developer.

Ivanhoe owns a 66% stake in the Oyu Tolgoi project, set to start commercial production in the first half of 2013, according to the plan.

It is expected to produce more than 1.2-billion pounds of copper and 650 000 oz of gold a year, in the first ten years of operation, with the mine producing around 1.7-billion pounds of copper and one-million ounces of gold at its peak, in year seven.

Vancouver-based Ivanhoe's other assets include a 58% ownership of SouthGobi Resources, which in turn owns the producing Ovoot Tolgoi mine in Mongolia, a 59% stake in Ivanhoe Australia, and a 50% holding in Altynalmas Gold.

Ivanhoe Australia, quoted on the TSX and ASX, has copper and gold projects in the bean-shaped country, while Altynalmas owns gold assets in Kazakhstan.

IVANPLATS

Speculation has emerged that Friedland was preparing to list another of his companies, Ivanplats, which owns a platinum-group metals property in South Africa and a copper asset in the Democratic Republic of Congo.

The company said in a June letter to shareholders that it had hired financial advisors with a view to a stock exchange debut either in late 2011 or early 2012.

At the time, the company said the planned flotation would be subject to equity market conditions.

Shares in Ivanhoe closed 4.2% lower on the TSX on Tuesday at C$17.53 apiece.

To subscribe to Mining Weekly's print magazine email subscriptions@creamermedia.co.za or buy now.