Mining company Rio Tinto has agreed to pay $138.75 million to settle a class-action lawsuit accusing it of misleading investors about the $7 billion expansion of the Oyu Tolgoi copper-gold mine in Mongolia.
The proposed settlement was filed in the U.S. District Court in Manhattan late Wednesday. It still requires judicial approval.
The lawsuit covered investors in Turquoise Hill Resources, based in Montreal, during the period from July 2018 to July 2019, when Rio Tinto held a controlling stake in the company. The investor group was led by funds advised by Pentwater Capital Management of Chicago.
The settlement also dismisses claims against former Rio Tinto CEO Jean-Sébastien Jacques, who left the company in March 2021.
All defendants denied any wrongdoing but agreed to settle to avoid legal uncertainty, costs, and prolonged litigation. A Rio Tinto spokesperson said the agreement was reached on “fair and reasonable terms” and does not represent an admission of guilt.
Turquoise Hill held a 66% stake in the Oyu Tolgoi mine, while the remaining 34% belonged to the Mongolian government. Plaintiffs alleged that Rio Tinto and Turquoise Hill falsely claimed the mine’s construction was on schedule and within budget, when in fact it was delayed by 2.5 years and nearly $2 billion over budget.
In 2022, Rio Tinto purchased all outstanding shares of Turquoise Hill for $3.3 billion, fully integrating the mine into its copper operations.
The lawsuit partly relied on whistleblower testimony from Richard Bowley, who worked at the mine and alleged that Rio Tinto was aware of expansion issues long before they were publicly disclosed.
The company publicly acknowledged the cost overrun only in 2019, when the project’s price tag rose to $6.5–$7.2 billion.
Investor attorneys plan to request up to 13% of the settlement amount—around $18 million—as a fee, plus up to $2.6 million for expenses.