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LONDON: Rio Tinto proposed on Monday to buy the 49 percent of Canada’s Turquoise Hill it does not already own for about $2.7 billion, paving the way for direct ownership of the massive Oyu Tolgoi copper-gold mining project in Mongolia.

The non-binding, all-cash C$34 per share offer represents a more than 32 percent premium to Turquoise Hill’s close on Friday.

It comes after Rio Tinto’s settlement with the Mongolian government in January of a long-running dispute over the $6.93 billion expansion of the Oyu Tolgoi project.

At present, Rio controls and operates the Oyu Tolgoi mine — which is 550 km (342 miles) south of Mongolia’s capital Ulaanbaatar and is one of the world’s largest known copper and gold deposits — via Turquoise Hill’s 66 percent stake. The government of Mongolia owns 34 percent.

“(The transaction) would simplify the Oyu Tolgoi ownership structure, strengthen Rio Tinto’s copper portfolio, and reinforce its long-term commitment to Mongolia,” the company said in a statement.

“In addition, the proposed transaction provides Turquoise Hill minority shareholders with the ability to realize compelling, immediate and certain value for their shares,” it said.

A number of problems have separated the parties over the years, with Rio delaying first production at the underground development of Oyu Tolgoi to the first half of 2023, after Turquoise Hill estimated additional funding required for the project had ballooned to $3.6 billion.

Turquoise Hill and Rio had also disagreed over funding for the expansion project before reaching a deal in April.

US activist investor Pentwater Capital, which has a 9 percent stake in Turquoise Hill, last year filed a class action in New York against Rio Tinto for damages, alleging it concealed the project’s problems from investors for months.

Pentwater Capital was not immediately available to comment on how it intends to vote on the bid.

“At the moment, this is our offer on the table,” Bold Baatar chief executive of Rio Tinto Copper, told reporters.

“It is a fair offer, obviously it is for shareholders to decide, we are going to be disciplined and if investors choose to stay in the project and overtime reject the offer, at least we are on the same page in terms of our long-term commitment,” he said.