KEY POINTS
- Lawsuit claims Rio Tinto misled investors on mine delays.
- Judge says Turquoise Hill was responsible for timing reports.
- CEO Jacques faces some remaining shareholder fraud claims.
In a lawsuit alleging that Rio Tinto and its former CEO Jean-Sébastien Jacques deceived investors by hiding issues with the $5.3 billion Oyu Tolgoi copper and gold mine project in Mongolia, a U.S. judge on Thursday rejected some of the allegations.
Judge dismisses claim on delayed draw bell project
In response to recently updated allegations, U.S. District Judge Lewis Liman in Manhattan said that Jacques allegedly disguised delays and cost overruns, while Rio Tinto deliberately concealed that it would miss a milestone deadline for “draw bell” blasting.
Liman rejected a major claim against Rio Tinto in a 40-page ruling, pointing out that Turquoise Hill Resources, which controlled 66% of the mine and Mongolia owned the remaining portion, had stated the draw bell schedule was on schedule.
Despite its relationship as the primary owner of Turquoise Hill, Liman stated Rio Tinto was not responsible for such comment. The judge also rejected allegations that Jacques meant to mislead shareholders in remarks he made regarding the mine in October 2018, indicating that he thought the schedule that month was correct.
Earlier shareholder claims against Jacques remain intact
There are still some accusations against Jacques based on previous remarks, according to Liman, who alleges that shareholders sufficiently claimed Jacques was aware of the delays at the start of the class term.
According to mining.com, from July 17, 2018, to July 31, 2019, the case, which is being spearheaded by funds advised by Pentwater Capital Management, aims to compensate Turquoise Hill stockholders.
Following criticism from shareholders for the company’s demolition of two culturally significant Aboriginal rock shelters in Australia’s Juukan Gorge, Jacques, who had managed Rio Tinto for four years, resigned in March 2021.
At the Juukan Gorge site, which revealed evidence of 46,000-year-old human settlement, Rio Tinto was judged to have complied with all applicable legislation.
U.S. District Court, Southern District of New York, In re Turquoise Hill Resources Ltd Securities Litigation, No. 20-08585, is the case number.
