Rio Tinto has agreed to pay $138.75 million to settle a lawsuit accusing the Anglo-Australian mining giant of defrauding investors. The lawsuit alleged that the company failed to disclose problems with its $7 billion underground expansion of the Oyu Tolgoi copper and gold mine in Mongolia. This preliminary settlement is subject to judicial approval.
The lawsuit claimed that Rio Tinto knowingly concealed how it would miss a deadline for 'draw bell' blasting, a key milestone, and that its former CEO hid delays and associated cost overruns. While a U.S. judge had previously dismissed some claims against Rio Tinto, this settlement resolves the remaining allegations. The financial cost of the settlement is a material expense for the company.
This settlement resolves a long-standing legal challenge related to a major project, providing greater certainty for Rio Tinto. While it comes with a significant financial outlay, it allows the company to move past the litigation and focus on future operations. The resolution of this lawsuit is an important step in addressing past governance and disclosure issues.
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