Rio Tinto is about to make a bid for Riversdale Mining at $15 per share. This would be a $3.5 billion takeover bid made by the British company. There is a likelihood of the move attracting a counter bid from the Brazilian mining giant Vale.
The attraction is Riversdale Mining owned coal assets in Africa. The company which is listed in Australia has some high quality coal deposits in Mozambique. A 24 % stake in Riversdale Mining is held by Tata Steel. Many of its mines are jointly owned with the Indian conglomerate.
While both the parties involved refused to comment on the possible takeover bid the market has been speculating over it for a while. Rio Tinto has already announced previously that it was looking at a number of acquisitions in the low single digit billion price range, and Riversdale fits the bill.
The Riversdale Mining Benga Licence saw its Coal Resources upgraded to 4 billion tonnes and Coal reserves increased to 502 million tonnes in May this year. The proved Resources are at 346 million tonnes while the probable are at 156 million tonnes. A Feasibility Study has begun to confirm the economic viability of this expanded mining operation.