Turquoise Hill Says CEO Has Been Forced Out by Owner Rio Tinto
(Bloomberg) -- Turquoise Hill Resources Ltd. said it was forced to change its CEO after controlling shareholder Rio Tinto Group warned it wouldn’t support his re-election amid a dispute over funding of a Mongolian copper mine.
The world’s second-biggest mining company owns 51% of Turquoise Hill, which in turn holds a two-thirds share in the giant Oyu Tolgoi project that’s key to Rio’s growth plans. Yet the two have been at loggerheads over how to fund the ongoing expansion of the project.
Turquoise Hill said Thursday that Chief Executive Officer Ulf Quellmann resigned after Rio told its board it wouldn’t vote for his re-election. The Canadian company brought back former executive Steeve Thibeault to serve as interim CEO as the board looks for a permanent replacement.
Oyu Tolgoi is Rio’s flagship growth project, but has increasingly become a headache for the company as costs spiral. Rio has said it’ll block Turquoise Hill from taking on more than $500 million in additional debt, telling the company to raise the extra funds through a rights offer. In response, Turquoise Hill has started arbitration proceedings against its parent.
Rio has also faced problems in Mongolia, where the government is seeking to change the framework that underpins the giant project.
“Rio Tinto is supportive of the re-set in leadership at Turquoise Hill and is committed to working collaboratively and proactively with both Turquoise Hill and the government of Mongolia to enable the successful delivery of the Oyu Tolgoi Project,” Rio said in a statement.
Thibeault served as Turquoise Hill’s chief financial officer between 2014 and 2017, and had led funding talks between the company and Rio Tinto back in 2015. He’s had no involvement in either company since April 2017, according to a statement.
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