Rio Tinto makes Oyu Tolgoi funding commitment

Rio Tinto (RIO) has committed to providing a funding package to Turquoise Hill Resources to ensure funding for the continuing development of the Oyu Tolgoi mine in Mongolia.

In a statement to the Australian Securities Exchange, Rio Tinto said it would provide a $US600 million bridge funding facility to Turquoise Hill, if necessary, which would essentially refinance its indebtedness to the mining giant.

"The facility will be used initially to refinance all amounts outstanding under an existing $US225 million short term funding facility provided by Rio Tinto in June 2013, and thereafter for the continued ramp up of phase one of the Oyu Tolgoi mine development," the group said.

"Rio Tinto has agreed to extend the short term funding facility until 28 August, 2013 and to permit funds repaid by Turquoise Hill from the proceeds of the sale of its 50% interest in Altynalmas Gold to be redrawn."

Rio Tinto also said it had agreed to waive its option to convert all or part of any amounts outstanding under the short term funding facility into TRQ common shares.