Rio Tinto gets Australian Treasurer’s nod to buy Riversdale

Rio Tinto gets Australian Treasurer’s nod to buy Riversdale

New York: Rio Tinto on Friday said it has received approval from the Australian Treasurer to buy Riversdale Mining Ltd, in which India’s Tata Steel has 24.4 per cent stake.

The Treasurer has overall responsibility for various policy matters including competition issues and foreign investments in Australia.

In a statement Rio Tinto said it has “received unconditional approval from the Australian Treasurer to acquire up to 100 per cent of Riversdale Mining Ltd."

“Accordingly...the condition to the takeover offer relating to this approval has been fulfilled," it added.

In December 2010, Anglo-Australian miner Rio Tinto had offered 16 Australian dollars per share to buy African-focused coal miner Riversdale in a deal valued $3.9 billion.

Last month, barring Tata Steel’s director in Riversdale, the Australian firm’s board had recommended Rio Tinto’s offer price at 16 Australian dollars per share.

Tata’s nominee on Riversdale board, N. K. Misra, had abstained from voting on Rio Tinto’s bid, sparking off the speculations that company may go for outbidding Rio Tinto’s offer.

Earlier this week, Tata Steel had said it is likely to remain invested in Riversdale, in view of meeting future coal demand from captive sources.

Riversdale has about 13 billion tonnes of rich coking and thermal coal reserves in its Benga and Zambeze projects in Mozambique.

Meanwhile, a consortium of five state run companies, International Coal Ventures (ICVL) may decide for bidding for a stake in Riversdale mines, based on ICVL board meeting’s decision on 22 January. The board is meeting to consider the preliminary reports submitted by merchant bankers.

ICVL is a consortium of five state-run companies including SAIL, CIL, NMDC, RINL and NTPC formed for mining assets’ acquisition overseas.