Rio Tinto (ASX, LSE: RIO) has agreed to pay nearly $139 million to settle a long-standing class action lawsuit accusing the company of concealing development delays at its $7 billion giant copper mine in Mongolia.The lawsuit, led by US hedge fund Pentwater Capital, alleged that the Australian miner had failed to accurately disclose the status of the underground expansion of the Oyu Tolgoi mine over a one-year period between 2018 and 2019.Specifically, Pentwater claimed that Rio, together with its Canadian subsidiary Turquoise Hill Resources, had violated federal securities laws by making assurances that the expansion was going as planned, when it was in fact 2.5 years behind and more than $1 billion over budget.Turquoise Hill had been a single-asset company owning 66% of the Oyu Tolgoi mine, with Mongolia’s government owning 34%. Rio held 51% of Turquoise Hill prior to buying out the remaining stake for $3.3 billion in 2022. A year later, the project came online.The case against the companies was filed in the US District Court for the Southern District of New York in 2020, seeking damages for Turquoise Hill’s shareholders.On Wednesday, Rio filed a preliminary settlement of $138.75 million to end the case, pending approval of a District Court judge. In a statement to Reuters, it said “the proposed settlement has been concluded without any admission by Rio Tinto or the individual defendants.”According to court documents, Rio entered the settlement to “avoid the uncertainty and expense of continued litigation.” Lawyers plan to seek legal fees of up to 13% of the settlement amount, or about $18 million excluding interest, plus up to $2.6 million for expenses, documents also showed.The settlement also resolved claims against Rio’s former CEO Jean-Sebastien Jacques, who stepped down in March 2021 amid controversies surrounding the company’s destruction of two culturally significant Aboriginal rock shelters in Australia.
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