HomeInvesting NewsTurquoise Hill Resources Shares, What Caused Today's 25% Rally?

Turquoise Hill Resources Shares, What Caused Today’s 25% Rally?

Published on

Turquoise Hill Resources (NYSE:TRQ)

After a slow start to the day, shares of Turquoise Hill Resources (NYSE:TRQ) have exploded higher, up 24.9% as of 10:20 AM ET. The Canadian copper miner has received an even larger acquisition offer than the one it rejected not long ago, and this has caused a stir in financial markets.

What’s the Reason?

Since March, when it originally proposed to acquire a 49% stake in the miner for 34 Canadian dollars (approximately $26.57) per share, mining giant Rio Tinto (RIO -3.19%) has been pursuing Turquoise Hill Resources (NYSE:TRQ). The deal is valued at $2.7 billion.

A representative from Turquoise Hill Resources (NYSE:TRQ) stated that the company would not accept the offer since the price did not represent the “full and fair value” of the miner.

This morning, Rio Tinto upped the ante, offering CA$40 a share for Turquoise Hill’s stock for about $3.1 billion. Canadian miner stock jumped on the news of Rio Tinto’s improved offer.

Contrarily, as of this writing, Rio Tinto stock had fallen by around 3.5 percent on Wednesday.

Turquoise Hill is already owned by Rio Tinto in a majority capacity. After a lengthy debate, the government of Mongolia has finally given Rio Tinto permission to begin mining at Oyu Tolgoi, one of the world’s largest copper and gold resources. The government owns a third of the mine, with the rest held by Turquoise Hill.

What Next?

Once underground mining operations begin at Oyu Tolgoi, Rio Tinto predicts the mine will be one of the world’s top five copper producers. The average annual copper output from Oyu Tolgoi is projected to reach 500,000 tonnes from 2028 to 2036. That is the amount of copper mined at Freeport McMoRan’s Cerro Verde mine in Peru, the world’s fifth-largest.

The urgency with which Rio Tinto wants to purchase Oyu Tolgoi is understandable. Because copper is in such high demand, Oyu Tolgoi will further bolster the mining giant’s presence in the sector. Demand from significant-end sectors, such as electric vehicles and renewable energy (wind and solar), drove copper prices to record highs in March. According to S&P Global, copper consumption will almost quadruple by 2035.

Featured Image:  Megapixl @Piter2121

See Disclaimer Please

Latest News

Recent Surge in Tesla Stock: Exactly What Caused It?

Tesla Stock (NASDAQ:TSLA) As of 11:30 a.m ET on Friday, Tesla stock was up 2.3%...

Here’s Why Carvana Stock Fell Quite So Much as 23.7% This Week

Carvana Stock (NYSE:CVNA) According to data provided by S&P Global Market Intelligence, Carvana stock fell...

Here’s Why Tellurian Stock Is Rising Again Today

Tellurian Stock (NYSEMKT:TELL) Tellurian stock was up 6.5% as of 11:06 p.m. ET today after...

Is It Time to Buy Chewy Stock?

Chewy Stock (NYSE:CHWY) Pet supplies are one of the few consumer goods that do well,...

More like this

2 Casino Stocks You Should Consider

With a recession on the horizon, investors must be more selective than ever. Analysts...

(Exxon Mobil Stock) Exxon Ceo Warns Biden Administration Against Restricting Fuel Exports

Exxon (Exxon Mobil Stock) opposes calls for oil corporations to reduce international exports and...

Apple Stock Loses $120 Billion Because of a Rare Downgrade

Apple stock just took a significant knock after it was once considered to be...

Meta Stock Tops Morningstar List of the Most Undervalued Stocks 

Morningstar compiled a list of the most undervalued stocks among those with a large...

Hd Stock up as Foundation to Contribute Up to $1 Million to Aid Communities Affected by Hurricane Ian

HD stock was trading at $280.23 as of 12:55 PM EDT. The Home Depot Foundation...

Making the Cut: Micron (Micron Stock)

Micron Technology Inc (Micron Stock) latest outlook brings expectations back to normal, although the...