News Wrap

IN THIS morning’s News Wrap: Rio Tinto faces expiry of Mongolian mine loans; engineering firms look to US amid local weakness, says Morgans; and cut to Argyle reserves likely forced Rio's hand

Lou Caruana

Rio Tinto faces expiry of Mongolian mine loans

Australia's export credit agency is one of nearly 20 banks whose commitment to fund Rio Tinto's Oyu Tolgoi mine in Mongolia is close to expiring, demonstrating the impact that delays are having on the giant copper and gold project, according to the Sydney Morning Herald.

A plan to expand Oyu Tolgoi has been delayed by disagreements with the Mongolian government and funding commitments from some commercial banks for stage two of the mine are due to expire within a fortnight.

Rio Tinto secured $US4.2 billion of funding for the project from a collection of development and commercial banks last year, with the World Bank's International Finance Corporation leading the way with a commitment to lend $1.4 billion.

The IFC told Fairfax Media this week that its $1.4 billion pledge was not subject to an expiry date.

Engineering firms look to US amid local weakness: Morgans

Australian engineering firms are increasingly looking to get a slice of strong growth in the US oil and gas sector to offset weak conditions at home, according to Roger Leaning, director of research at Morgans Financial, according to the Australian Financial Review.

Cut to Argyle reserves likely forced Rio's hand

Following the release of Rio's annual report, including an update on its resource and reserves information, Macquarie's analysts have outlined that reserves at Argyle fell 27%, which was offset by a 14% jump in grade, meaning overall net recoverable diamonds fell 16%, according to The Australian.