The equipment includes principal components for the 100,000-mt/d Oyu Tolgoi phase-one copper-gold concentrator, including two 38-ft-diameter, semi-autogenous grinding (SAG) mills, four ball mills, re-grind mills, crushers, motors, gearless drives, conveyors and flotation cells. Also included is the hoist and major components for the sinking of Shaft No. 2—the 10-m-diameter, main production shaft for the underground block-cave mine at the Hugo North Deposit.

Much of the equipment originally was ordered by Ivanhoe Mines from various manufacturers while it was waiting for an Investment Agreement with the Government of Mongolia. Ivanhoe subsequently transferred ownership of the equipment to strategic partner Rio Tinto in August 2008 under an agreement between the companies. Additional equipment also was acquired by Rio Tinto directly from suppliers. At the time, Ivanhoe required funds for the ongoing development of the Oyu Tolgoi project. The equipment-sale agreement with Rio Tinto ensured that the procurement and delivery schedules for critical, long lead time major mining and milling equipment were protected while Ivanhoe and Rio Tinto worked with the Mongolian government to conclude the mutually-acceptable, longterm Investment Agreement that was executed in October 2009.

Robert Friedland, executive chairman of Ivanhoe Mines, said, “The joint Ivanhoe Mines-Rio Tinto Oyu Tolgoi Technical Committee has conditionally approved a US$758 million budget for 2010 that includes Ivanhoe’s repurchase from Rio Tinto of major items of mining and milling equipment. Having this equipment available now, rather than being forced to wait behind competitors in a delivery queue, is vital to our plan to begin commercial production from Oyu Tolgoi in 2013.”

With this transaction, Rio Tinto increased its ownership in Ivanhoe Mines from 19.6% to 22.4%. The transaction is subject to the approval of the Toronto Stock Exchange.

Rio Tinto holds rights to subscribe for common shares from Ivanhoe's treasury and also to make purchases on the open market that could increase Rio Tinto’s stake in Ivanhoe to up to 46.6% during the next 19 months.