LONDON (Reuters) -Global miner Rio Tinto (LON:RIO) on Wednesday sweetened its takeover proposal for the 49% of Canada's Turquoise Hill Resources (TSX:TRQ) it does not already own by $400 million to an all-cash $3.1 billion.
To boost its chances of gaining direct ownership of the massive Oyu Tolgoi copper-gold mining project in Mongolia, Rio Tinto's new offer means Turquoise Hill's minority shareholders would receive $40 ($31) per share.
The Canadian company last week rejected as too low an offer of C$34 ($26.57) per share received in March after appointing an independent committee to determine if it was in the best interests of minority shareholders.
Rio Tinto Chief Executive Jakob Stausholm said the improved offer provides "full and fair value for Turquoise Hill shareholders."
Turquoise Hill, a single-asset company holding 66% of one of the world's largest known copper and gold deposits, 550 km (342 miles) south of Mongolia's capital Ulaanbaatar, said its board is reviewing the proposal.
Copper is poised for strong demand as a result of the transition away from fossil fuels, as it is needed for wiring in electric vehicles, their charging stations and other renewable energy infrastructure.
Turquoise Hill's shares rose as much as 24% after the new offer, while Rio's share price fell 2% in London.
Rio Tinto and the Mongolian government, which owns the remaining 34% of Oyu Tolgoi, earlier this year ended a long-running dispute over the $7-billion expansion of the mine.
Rio said its improved offer is conditional on Turquoise Hill not raising equity of more than $1 billion that it had said it needs to finance the project.
In May, Rio agreed to provide interim debt funding of up to $400 million.
Rio's initial offer had seen opposition from major Turquoise Hill shareholders, including activist investor Pentwater Capital Management, the largest minority shareholder with a 10% stake, and SailingStone Capital Partners at 2.2%.
Pentwater did not respond to a request for comment on the new offer. SailingStone declined to comment.
($1 = 1.30 Canadian dollars)