Ivanhoe Mines is a step closer to
securing financing for the Oyu Tolgoi 
project after adding three financial institutions to its “core
lender group” that could potentially lend money. The Vancouver-based miner
said BNP Parabas, Standard Charter, and Export Development Canada (EDC) have
been added to a group that already includes the European Bank for
Reconstruction and Development (EBRD) and the International Finance Corp.
(IFC).

Between the five groups, Ivanhoe
hopes to obtain more than USD2 billion in loans to develop Oyu Tolgoi. However,
the institutions have not committed any money yet. Ivanhoe said that the IFC
and EBRD are considering up to USD600 million in financing, while EDC is
considering up to USD500 million.

“The completion of the core lender
group is a key step in the process of securing the Oyu Tolgoi financing
package, which we expect to close in the first quarter of 2011,” executive
chairman Robert Friedland said in a statement. He said the company evaluated
“expressions of interest” from 13 banks before choosing these ones.

Ivanhoe badly needs the money,
because pre-production costs at Oyu Tolgoi have been pegged at a whopping
USD4.6 billion. The company is spending more than USD700 million this year, but
will need much more to develop the project.

Ivanhoe is also receiving financing
from its strategic investor Rio Tinto Ltd. The companies have skirmished
recently as Rio opposed Ivanhoe’s shareholder rights plan and appears to want
to convert its stake in Ivanhoe into a direct stake in the Oyu Tolgoi project.