Activist investor Pentwater takes aim at Turquoise, Rio boards over CEO exit

Oyu Tolgoi copper-gold mine in the South Gobi region of Mongolia, approximately 550 km south of the capital Ulaanbaatar, holds one of the largest undeveloped high-grade copper deposits in the world. (Image courtesy of Oyu Tolgoi LLC)

Activist investor Pentwater Capital Management LP on Friday condemned the surprise resignation of Turquoise Hill Resources Ltd’s chief executive officer following pressure from the Canadian miner’s top shareholder Rio Tinto.

Turquoise Hill said on Thursday Ulf Quelmann resigned, effective March 3, after Rio said it would vote against his re-election to the board.

Pentwater, Turquoise Hill’s largest shareholder after Rio with a 9% stake, said it believed the boards of Turquoise and Rio breached their legal obligations in the way Quelmann’s departure was handled.

In response to Pentwater’s statement, a Rio spokesman said the company supports the reset of leadership at Turquoise.

Turquoise Hill did not immediately respond to requests for comment.

During Quelmann’s over two-year tenure as CEO, Turquoise found itself locked in a feud with Rio over how to fund the underground expansion of the massive Oyu Tolgoi copper-gold mine in Mongolia.

Rio is the operator for the mine and owns 51% of Turquoise Hill, which in turn owns 66% of Oyu Tolgoi.

Pentwater did not detail what actions it plans to take and did not immediately respond to a request for comment.

(By Shariq Khan; Editing by Sriraj Kalluvila)

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