Canada鈥檚 Turquoise Hill Resources (TSX: TQR) has set 聽on the proposed $3.3 billion takeover of the company by Rio Tinto (ASX, LON: RIO).
The meeting has been repeatedly delayed because of the opposition of key minority shareholders in Turquoise Hill, mainly US-based fund managers.听
The situation took a turn for the worst earlier this month, after a Canadian top securities regulator decided to review the transaction, following a聽side deal between Rio Tinto and dissident shareholders.听
Turquoise Hill said Quebec鈥檚 Autorit茅 des march茅s financiers (AMF)聽has cleared the transaction and that its board has repeated its unanimous recommendation to minority shareholders to vote for the sweetened offer.
Rio Tinto initially offered C$34 a share in March this year, but increased it to C$43 per share in cash in August. That was a more than 19% premium to the stock鈥檚 end-of-August closing price and a 67% premium from the day before the initial offer was made.
The Australian mining giant has had a rocky relationship with Turquoise Hill, particularly over聽how to fund Oyu Tolgoi鈥檚 expansion. The mining giant has also聽drawn criticism聽from some of Turquoise Hill鈥檚 minority shareholders about the control it exerts over the company.
The Melbourne and London-based firm, which has mined copper from Oyu Tolgoi鈥檚 open pit for a decade, and the Mongolian government聽ended earlier this year聽a long-running dispute over the $7 billion expansion of the mine.
Biggest new copper mine聽
Once completed, the underground section of Oyu Tolgoi will lift production from 125,000鈥�150,000 tonnes in 2019 to 560,000 tonnes at peak output, which is now expected by 2025 at the earliest. This would make it the biggest new copper mine to come on stream in several years.
鈥淩io Tinto鈥檚 strategy over its stake in Turquoise Hill has been subject to discussion for many years, but we didn鈥檛 think it would end up offering to buy out the minorities based on previous form,鈥� BMO Metals and Mining analysts said in a note to investors.
鈥淕iven the dearth of copper opportunities elsewhere, combined with its recently lowered risk profile, perhaps increasing its Oyu Tolgoi exposure now makes sense,鈥� BMO Alexander Pearce and David Gagliano wrote in September.
Rio Tinto chief executive Jakob Stausholm has said the proposed takeover would simplify governance, improve efficiency and create greater certainty of funding for the long-term success of the Oyu Tolgoi project.
Experts forecast a vast deficit in the copper market due to a ramp up in the clean energy and electric vehicles (EV) sectors.
It is estimated the copper industry needs to聽spend聽more than $100 billion聽to build mines able to close what could be an annual supply deficit of eight million tonnes by 2032.