News Releases

Rio Tinto News Release: Rio Tinto Takes Strategic Stake in Ivanhoe Mines

October 18, 2006

Rio Tinto has reached agreement to acquire a holding of 19.9 per cent in Ivanhoe Mines in
order to jointly develop and operate Ivanhoe’s Oyu Tolgoi copper-gold complex in Mongolia’s
South Gobi region. A joint Ivanhoe-Rio Tinto technical committee will engineer, construct
and operate the project. This agreement creates a defined path for Rio Tinto to become the
largest shareholder in Ivanhoe Mines.

The first 9.95 per cent shareholding worth US$303 million will be taken up immediately, with
the second 9.95 per cent holding, valued at US$388 million, being taken up at the conclusion
of a satisfactory long term investment agreement with the Mongolian government.

In addition, Rio Tinto has non-transferable warrants to reach a 33.35 per cent shareholding
in Ivanhoe Mines, which, if exercised, will represent a total investment of approximately
US$1.5 billion. Rio Tinto also has the right during the first five years to acquire up to an
additional 6.65 per cent stake in Ivanhoe through open market transactions, which would
take its maximum holding in Ivanhoe to 40 per cent.

“Rio Tinto is pleased to be able to gain an interest in the world’s largest undeveloped
copper-gold resource and to be able to bring its world class operating and technical
capability to the Oyu Tolgoi project. We look forward to taking part in negotiations with the
Mongolian government on the long term investment agreement for the project.” said Tom
Albanese, Rio Tinto director Group Resources.

Mr. Albanese said that Oyu Tolgoi will be an important project for Mongolia, its economy and
its people.

“Wherever we operate, Rio Tinto employs the same high standards of health, safety,
environmental performance and community relations. The Oyu Tolgoi project will represent a
major investment in the country. It will result in increased local employment, the
development of important infrastructure in the South Gobi region and can become a catalyst
for regional social and economic development.”

Rio Tinto’s investment will be structured in the following stages:

Rio Tinto immediately will take up an initial private placement of 37.1 million Ivanhoe shares
at a price of US$8.18 per share. This investment will give Rio Tinto 9.95 per cent of Ivanhoe
issued share capital for a total investment of US$303 million.

Rio Tinto will take up a second tranche private placement following the satisfactory
conclusion of an investment agreement between Ivanhoe and the Mongolian Government.
This second tranche will consist of 46.3 million shares of Ivanhoe at a price of US$8.38 per
share, a further investment of US$388 million. Rio Tinto has the option to exercise the
second tranche earlier. Together these two tranches will give Rio Tinto up to 19.9 per cent
of Ivanhoe’s enlarged issued share capital for a total combined investment of US$691
million.

In addition to the private placements, Rio Tinto also will be granted non-transferable
warrants over approximately 92.1 million Ivanhoe shares. Tranche A will entitle Rio Tinto to
purchase approximately 46.1 million newly issued common shares at a price between
US$8.38 and US$8.54 for a period (not exceeding four years) ending one year after Ivanhoe
enters into an investment agreement with the Government of Mongolia. Tranche B will
entitle Rio Tinto to purchase approximately 46.1 million newly issued common shares at a
price between US$8.38 and US$9.02 for a period (not exceeding five years) ending two
years after Ivanhoe enters into an investment agreement with the Government of Mongolia.
The warrants will be subject to the approval of the Ivanhoe shareholders.

Under the agreement, Rio Tinto has the right to acquire additional securities and participate
in future financings by Ivanhoe, so as to maintain its proportional equity interest in Ivanhoe.

If the warrants were to be fully exercised, Rio Tinto would hold approximately 33.35 per cent
of Ivanhoe’s common shares on a fully diluted basis (34.33 per cent undiluted).

Rio Tinto has no present intention of acquiring other securities of Ivanhoe, except as regards
its right to acquire additional securities so as to maintain its proportional equity interest in the
future, or of disposing of any of the securities of Ivanhoe which it holds. Depending upon its
evaluation of Ivanhoe’s business, prospects and financial condition, the market for Ivanhoe’s
securities, general economic conditions and other factors, Rio Tinto may acquire additional
securities of Ivanhoe, including up to an additional 6.65 per cent stake in Ivanhoe, or sell
some or all of the securities it holds.

For further information, please contact:

LONDON

Media Relations


Nick Cobban
Office: +44 (0) 20 7753 2305
Mobile: +44 (0) 7920 041 003

Investor Relations

Nigel Jones
Office: +44 (0) 20 7753 2401
Mobile: +44 (0) 7917 227 365

David Ovington
Office: +44 (0) 20 7753 2326
Mobile: +44 (0) 7920 010 978

AUSTRALIA

Media Relations


Ian Head
Office: +61 (0) 3 9283 3620
Mobile: +61 (0) 408 360 101

Investor Relations

Dave Skinner
Office: +61 (0) 3 9283 3628
Mobile: +61 (0) 408 335 309

Susie Creswell
Office: +61 (0) 3 9283 3639
Mobile: +61 (0) 418 933 792

Website: www.riotinto.com
High resolution photographs available at: www.newscast.co.uk

Media Contact

Please direct media request and queries to:

Roy McDowall

+1.514.848.1506  
Roy.McDowall@Turquoisehill.com
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