TABJ - June 22 - Mining major Rio Tinto will pay up $502 million in order to expand its holding in one of Mongolia’s most exciting copper-gold plays.

By increasing its share in Ivanhoe Mines Ltd. to 46.5 per cent, Rio will gain greater exposure to the Oyu Tolgoi project; one of the largest under-explored copper-gold projects on the globe, in development at a cost of $5.9 billion and on schedule to commence initial production from the first quarter of 2013.

"Exercising the warrants provides further funds for developing Oyu Tolgoi," Andrew Harding, chief executive officer of Rio Tinto's copper division, told press.

“Rio Tinto took over management of the project in December. Our industry-leading operating and technical capabilities will enable the development of this world-class project to the highest of standards, for the benefit of our shareholders and the people of Mongolia.”

It is reported that the mining conglomerate will invest $2.3 billion on development of Oyu Tolgoi this year, in order to meet the planned production date. Construction is already well underway. This latest move opens up possibilities for Rio to add another director to the seven it has sitting on Ivanhoe’s board, and also potentially increase its stake again to 49 per cent by January 18 next year, if it elects to pick up further shares by exercise of its subscription rights.