MARKET REPORT: Rio Tinto cancels debt in a bid to strike deal with Mongolia


[ad_1]

MARKET REPORT: Rio Tinto lets Mongolian government off the hook over £ 1.7bn loan to move Gobi Desert mine deal forward










Mining giant Rio Tinto made early gains after agreeing to forgo a multibillion-pound loan to the Mongolian government in a bid to advance a major mining project in the Gobi Desert.

But shares ultimately fell 0.1%, or 6p, to 4748p after the FTSE 100 company canceled the £ 1.7bn ($ 2.3bn) loan under a new agreement to complete the development of the huge copper-gold mine in Oyu Tolgoi.

Debt cancellation is part of a larger proposal to get the project back on track after it was beset by delays and funding disputes, damaging Rio’s relationship with the Ulan government -Bator.

Delays: Rio Tinto canceled a £ 1.7 billion loan it had given to the Mongolian government as part of a new deal to complete development of the massive Oyu Tolgoi copper-gold mine ( Photo)

Other parts of the deal include the removal of a controversial funding deal for the project, which some Mongolian politicians had asked to change.

The company’s concession follows a meeting between Rio Managing Director Jakob Stausholm and Mongolian Prime Minister Oyun-Erdene Luvsannamsrai as well as several MPs who previously opposed the project.

Oyu Tolgoi, one of Rio’s biggest assets, is nearly two years behind as the budget climbed to around £ 4.9bn from £ 4bn previously.

Stock Watch – WANdisco

Software company WANdisco peaked in two months after landing a contract with one of Britain’s top five banks.

The cloud computing specialist will help move around 500 terabytes of data from the bank to a remote database managed by Amazon’s IT arm.

There is also potential for more data transfers in the future, WANdisco said, noting that the bank is moving its data to explore potential uses of artificial intelligence in the future.

Shares were up 5.5%, or 18p, to 348p.

When completed, it will be one of the largest copper mines in the world, producing around half a million tonnes per year for use in electronics, cars and household appliances.

The Mongolian government has a 34 percent stake in the project and has funded its share of the development costs through loans from Rio and will receive income from the mine once the debts are paid off.

However, the new debt cancellation agreement means the government will start receiving payments from Oyu Tolgoi sooner than expected.

The deal also means that production from the site’s underground mine is now due to start in the first half of 2023.

The FTSE 100 fell 0.83%, or 60.34 points, to 7,231.44 while the FTSE 250 slipped 1.22%, or 280.49 points, to 22,647.22.

Shares have come under pressure after Boris Johnson warned of a “tidal wave” of infections at Omicron in a televised address on Sunday night, raising fears that the new variant and the restrictions could hold back the UK economy.

Growing cases of the variant have also dampened expectations that the Bank of England will raise interest rates later this week.

Airlines shares were below cosh as Covid-19 cases rose, with British Airways owner IAG falling 5.2%, or 7.08p, to 130.3p while easyJet fell 4, 2%, or 21.8p, to 503.8p and Ryanair plunged 4 percent. cent, i.e. € 0.6, to € 14.3.

Budget airline Wizz Air fell 4.2%, or 180p, to 4113p after analysts at HSBC downgraded the stock to “cut” it from “hold”.

Rolls-Royce, which makes jet engines for passenger planes, also lost 4.8%, or 5.86 pence, to 116.94 pence, fearing a slowdown in travel could dampen demand for its clients.

Outsourcing giant Capita plunged 18.7%, or 8.44 pence, to 36.76 pence after its revenue stagnated due to losses in some of its contracts.

Revenues for the 11 months to end-November rose only 0.6% year-on-year to £ 2.9 billion as profits from its public sector contracts were offset by lower business activity private.

SThree, a recruiter for the science and engineering fields, also fell – from 13.2 percent, or 72p to 474p – as its CEO made its way to exit.

Mark Dorman will step down at the end of the year, Timo Lehne, managing director of the company’s German, Austrian and Swiss operations, will take over as interim managing director.

The news eclipsed a record set of results, which saw SThree’s revenue rise 19% year-on-year to £ 356million in the year through the end of November.

[ad_2]

About Brandon A. Hood

Check Also

The Swiss National Bank has started unloading its largest holdings in US stocks, incl. Apple, Microsoft, Amazon, Alphabet, Meta

He bought Tesla anyway, which is down 52%. He suffered massive casualties. And there’s a …