NEW YORK, June 18 (Reuters) - Rio Tinto (RIO.L), opens new tab, (RIO.AX), opens new tab agreed to pay $138.75 million to settle a lawsuit that accused the Anglo-Australian mining giant of defrauding investors by concealing problems with its $7 billion underground expansion of the Oyu Tolgoi copper and gold mine in Mongolia.
A preliminary settlement of the proposed class action was filed late on Wednesday with the U.S. District Court in Manhattan, and requires a judge's approval.
The lawsuit sought damages on behalf of shareholders of Montreal-based Turquoise Hill Resources between July 2018 and July 2019, when that company was majority-owned by Rio Tinto.
Shareholders were led by funds advised by Chicago-based Pentwater Capital Management.
The settlement also resolved claims against former Rio Tinto Chief Executive Jean-Sebastien Jacques, who stepped down in March 2021.
All defendants denied wrongdoing, but settled to eliminate the uncertainty, burden and cost of litigation, court papers show.
Rio Tinto and Pentwater declined to comment.
Turquoise Hill had been a single-asset company owning 66% of the Oyu Tolgoi mine, with Mongolia's government owning 34%.
Pentwater accused Rio Tinto and Turquoise Hill of fraudulently assuring that the Oyu Tolgoi mine was "on plan" and "on budget," even as it was falling up to 2-1/2 years behind schedule and running as much as $1.9 billion over budget.
In 2022, Rio Tinto bought the 49% of Turquoise Hill it didn't already own for $3.3 billion, fully integrating the mine into its copper portfolio.
The lawsuit stemmed partly from allegations by whistleblower Richard Bowley, who worked at the mine and claimed Rio Tinto knew about problems with the expansion before it publicly disclosed them.
Rio announced the possible $1.9 billion overrun in 2019, and projected total capital expenditures of $6.5 billion to $7.2 billion.
Lawyers for the shareholders plan to seek legal fees of up to 13% of the settlement amount, or about $18 million excluding interest, plus up to $2.6 million for expenses, court papers show.
The company, Hexagon, says AEON will start work later this year in live industrial settings, testing its ability to complement the workforce.
The case is In re Turquoise Hill Resources Ltd Securities Litigation, U.S. District Court, Southern District of New York, No. 20-08585.
Reporting by Clara Denina in London and Jonathan Stempel in New York; Editing by Leslie Adler and Sonali Paul

Published Date:2025-06-19