Source: Bloomberg.com, Reuters.com    Date: May 21, 2010

Ivanhoe Mines Ltd., building the Oyu Tolgoi project with Rio Tinto Group, said it may bring in another partner. “This is likely to have another participant before it’s all over,” Deputy Chairman Peter Meredith said Wednesday at a conference in London. “We’ve had a lot interest from other majors, but our partner is Rio Tinto so we have to be respectful of what their dreams and desires are.”

Most huge copper mines have multiple owners, such as the world's biggest - Escondida in Chile - so it would be natural for Oyu Tolgoi to have another partner. Ivanhoe said in January it hired Citigroup Inc. to study options, including debt and equity offerings and asset sales. The company wants to maintain control of the project, Mr. Meredith said.

It may make sense for Chinese interests to study investment in the mine, he said. SouthGobi Resources Ltd., a coal producer in Mongolia 57 percent-held by Ivanhoe, last year sold USD500 million of convertible bonds to China Investment Corp., the sovereign wealth fund of the world’s most populous nation.

“Mongolia’s a fledgling place where the multiples haven’t reached the limits that you get elsewhere,” Mr. Meredith told reporters. “If CIC or other folk were thinking of investment, that’s probably a pretty good place to look providing the values are there and the numbers are there.”

It made sense to consider a divestment since Ivanhoe was primarily an exploration company, Mr. Meredith said. "People don't judge us by earnings per share ... As it gets closer to production, it makes sense that somebody who wants copper revenues will come along and say maybe I need a piece of that."

Ivanhoe holds 66 percent of Oyu Tolgoi and Mongolia the rest. Rio, the world’s third largest mining company, owns 22.4 percent of Ivanhoe and has an option to increase its stake to about 44 percent. Oyu Tolgoi has a projected mine life of 27 years, but this would more than double to 59 years if inferred resources are included.