Rio Tinto has offered to buy out the 49 percent of shares it does not currently own in Turquoise Hill Resources for approximately $2.7 billion. The purchase would give Rio Tinto direct control of the Oyu Tolgoi copper and gold mine in Mongolia.

Rio Tinto currently owns 51 percent of Turquoise Hill. A takeover would simplify Oyu Tolgoi’s ownership structure, improving efficiency, Rio Tinto said in a statement. If the deal goes ahead, Rio Tinto would hold a 66 percent interest in Oyu Tolgoi, with the rest owned by Mongolia.

Under the terms of the Proposed Transaction, Turquoise Hill minority shareholders would receive C$34 in cash per Turquoise Hill share, representing a premium of 32 percent to Turquoise Hill’s last closing share price on the Toronto Stock Exchange.

The proposed transaction follows the recent comprehensive agreement reached between Rio Tinto, Turquoise Hill and the government of Mongolia to move the Oyu Tolgoi project forward, reset the relationship between the partners and approve commencement of underground operations. It would simplify the Oyu Tolgoi ownership structure, strengthen Rio Tinto’s copper portfolio, and reinforce its long-term commitment to Mongolia. In addition, the proposed transaction provides Turquoise Hill minority shareholders with the ability to realize compelling, immediate and certain value for their shares at a time when uncertainties inherent in the development of the underground operations and funding of such development remain.

“Rio Tinto strongly believes in the long-term success of Oyu Tolgoi and Mongolia, and delivering for all stakeholders over the long-term. That is why we want to increase our interest in Oyu Tolgoi, simplify the ownership structure, and further strengthen Rio Tinto’s copper portfolio,” Rio Tinto Chief Executive Jakob Stausholm said. “We believe the terms of proposal are compelling for Turquoise Hill shareholders.

“The proposed transaction would enable Rio Tinto to work directly with the government of Mongolia to move the Oyu Tolgoi project forward with a simpler and more efficient ownership and governance structure. With our relationship reset and the underground operations commenced, this transaction demonstrates our clear and unequivocal long-term commitment to Mongolia,” said Stausholm.

Rio Tinto, the world’s second-biggest mining company by market value, wants to boost its production of commodities such as copper, lithium and aluminum as it seeks to play a key role in the world’s transition away from fossil fuels to cleaner alternatives. Currently, the company relies on iron ore, used in steel, for the bulk of its earnings.

Many analysts expect supply of copper will fall short of demand in the years ahead.

The proposal would also increase Rio Tinto’s exposure to Mongolia, a landlocked country sandwiched between Russia and China, amid heightened geopolitical tensions between those countries and the West.

Rio Tinto said last week it was terminating all commercial relationships with Russian businesses in response to the conflict in Ukraine. Rio Tinto buys fuel and other products from Russia for Oyu Tolgoi.