Rio doubles stake in South African smelter as BHP sells up

1st Feb 2012 07:00

Anglo-Australian mining colossus Rio Tinto has taken majority control of South African firm Richards Bay Minerals (RBM) after buying up a stake from fellow mining heavyweight BHP Billiton.BHP has agreed to exercise a put option - a contract to sell shares - agreed with Rio Tinto as part of RBM's restructuring in 2009, and this will result in Rio acquiring BHP's 37% stake, thus doubling Rio's holding in the company to 74%.The final consideration for the acquisition of the stake in the South African mineral sands mining and smelting operation will be determined through a previously agreed valuation process. "RBM is an important part of Rio Tinto's world-class titanium dioxide portfolio," asserted Harry Kenyon-Slaney, the boss of Rio Tinto Diamonds & Minerals. "Doubling our stake in the business solidifies our position at a time when the long-term outlook is strong and demand for higher grade titanium dioxide is growing, driven by urbanisation and rising environmental standards," he added.Which begs the question, why did BHP Billiton sell?"BHP Billiton's position in RBM is a non-operated shareholding in an industry in which it holds no other interests," explained Dr Xolani Mkhwanazi, BHP Billiton Southern Africa Chairman. "BHP Billiton will continue operating its Southern African energy coal, aluminium and manganese businesses in a sustainable manner," Dr Mkhwanazi added.jh