Rio Tinto has reached an in-principle agreement with Turquoise Hill Resources in which Rio Tinto will acquire the 49 percent of Turquoise Hill shares it did not already own for approximately US$3.3 billion.

The deal, announced Sept. 1, values each share of Turquoise Hill at C$43 and the agreement has the unanimous approval of the independent Special Committee of Turquoise Hill’s Board of Directors according to a press release from Rio Tinto.

Rio Tinto has been seeking to add direct exposure to Turquoise Hill’s Oyu Tolgoi asset, which is expected to be the world’s fourth-largest copper mine once an underground expansion is completed. Through this agreement, Rio Tinto will own 66 percent of the Oyu Tolgoi mine and the Mongolian government would hold the remaining 34 percent.

The deal requires two thirds of shareholders, including Rio Tinto, to vote in support. On top of that, more than 50 percent of minority shareholders must vote in favor. Rio said it hoped a vote would take place “as early as possible in the fourth quarter of 2022.

“Rio Tinto is committed to moving Oyu Tolgoi forward in direct partnership with the government of Mongolia to realize its full potential for all stakeholders,” Rio’s Chief Executive Officer Jakob Stausholm said in a statement. “This agreement represents another significant step following the recent commencement of the underground operations, and will simplify governance, improve efficiency and create greater certainty of funding for the long-term success of the Oyu Tolgoi project.”

Rio Tinto Copper Chief Executive Bold Baatar said: “The transaction simplifies the ownership structure of Oyu Tolgoi and enables Rio Tinto to focus on working in partnership directly with Erdenes Oyu Tolgoi and the government of Mongolia to create long-term value for all stakeholders.

“Turquoise Hill minority shareholders will realize a significant and immediate cash premium for their shares at a time when uncertainties inherent in the development of the underground operations remain. Turquoise Hill will also avoid the issuance of any equity component as part of the US$3.6 billion incremental funding requirement through to the completion of the Oyu Tolgoi project. Securing the approval of the Special Committee to our agreement in principle, following extensive negotiations, was essential for Rio Tinto to progress this proposed transaction.”