Rio Tinto’s proposed $3.3 billion takeover of Canada’s Turquoise Hill Resources and by extension the Oyu Tolgoi copper and gold project in Mongolia has been postponed indefinitely as Quebec’s top securities regulator has decided to review the transaction.

Turquoise Hill announced that the Autorité des marchés financiers (AMF) is investigating whether a side deal between Rio Tinto and dissident shareholders is legal.

“The AMF considers the transaction as currently structured to raise public interest concerns,” the company said.

“The special committee has been engaged with Rio Tinto in order to address the differential treatment of minority shareholders resulting from the agreements. In the event that terms are reached that satisfy the special committee’s concerns, the company will provide shareholders with supplemental disclosure regarding such revised terms. In order to provide shareholders with sufficient time to consider such supplemental disclosure, the company has determined to adjourn the special meeting of Turquoise Hill shareholders, currently scheduled for November 15, 2022 at 10:30 a.m. (Eastern time), to a date to be determined,” the company said in a statement.

Minority shareholder CaravelCapital Investments said last week the agreement inked by Rio Tinto, Pentwater Capital Management and SailingStone Capital Partners gives dissidents preferential treatment over smaller holders.

Caravel filed complaints with both the Ontario Securities Commission and the AMF on fairness grounds, The Globe and Mail reported.
The new delays adds another layer of uncertainty over the deal that would grant the Rio Tinto direct ownership of the giant Oyu Tolgoi copper-gold mine in Mongolia.

Under the deal, both investors would be paid out 80 percent of the takeover amount being offered to all Turquoise Hill shareholders and, after a ruling from an arbitrator, the remaining 20 percent plus interest, and potentially much more.

The two firms, which had both openly opposed to the acquisition of Turquoise Hill by Rio, agreed to sit out the shareholder vote originally scheduled for Nov. 1, then moved up to Nov. 8 and again to Nov. 15 on Tuesday.

Once completed, the underground section of Oyu Tolgoi will lift production from 125,000–150,000 tonnes in 2019 to 560,000 tonnes at peak output, which is now expected by 2025 at the earliest. This would make it the biggest new copper mine to come on stream in several years.