UPDATE 1-Wide interest in Ivanhoe project stake-exec

* Major mining groups interested in Oyu Tolgoi in Mongolia

* Ivanhoe natural seller since it mainly exploration firm

* Would respect wishes of partner Rio Tinto

(Adds more details, quotes, background)

By Eric Onstad

LONDON, May 19 (BestGrowthStock) – Major mining firms have shown
strong interest in buying a stake in the Oyu Tolgoi copper-gold
project in Mongolia, majority owner Ivanhoe Mines (IVN.TO: ) said
on Wednesday.

“We’ve had a lot of interest, we’ve had a lot of interest
from other majors,” Deputy Chairman Peter Meredith said on the
sidelines of the World Mining Investment Congress.

He added any sale would have to be done with the knowledge
of Rio Tinto (RIO.L: ) (RIO.AX: ), the operator of Oyu Tolgoi, due
to be one of the world’s three biggest copper-gold mines.

“Our partner is Rio Tinto, so we have to be respectful of
what their dreams and desires are,” he said.

Rio owns 22.4 percent of Ivanhoe and has the right to
increase that to 46.6 percent over the next two years.

Ivanhoe owns 66 percent of Oyu Tolgoi, due to cost $4.6
billion to build, and the Mongolian government has the remaining
stake.

It made sense to consider a divestment since Ivanhoe was
primarily an exploration company, Meredith said.

“People don’t judge us by earnings per share … As it gets
closer to production, it makes sense that somebody who wants
copper revenues will come along and say maybe I need a piece of
that.”

Most huge copper mines have multiple owners, such as the
world’s biggest – Escondida in Chile – so it would be natural
for Oyu Tolgoi to have another partner.

“There is likely to be another participant before it is all
over,” Meredith said.

The founder and 27-percent owner of Ivanhoe, Chairman Robert
Friedland, would be key in deciding about selling a stake,
Meredith said.

Output is due to start in 2013 and the mine is due to
produce an average of 544,000 tonnes of copper and 650,000
ounces of gold a year during the first 10 years.

Oyu Tolgoi has a projected mine life of 27 years, but this
would more than double to 59 years if inferred resources are
included.

Stock Market Advice

(Editing by David Cowell)

UPDATE 1-Wide interest in Ivanhoe project stake-exec