Rio edges nearer Riversdale deal

24th Jan 2011 08:04

Rio Tinto moved a step nearer the completion of a $3.9bn deal for coal miner Riversdale after major shareholder Tata Steel give approval for the offer.Mozambique-focused Riversdale said no superior proposal to Rio Tinto's offer had been received and it was not aware of any party having an intention to make such a proposal. Reports in Australia have suggested an Indian consortium will decide by 27 January whether to make a rival bid. Riversdale managing director Steve Mallyon told reporters though he "had not had one call" from the consortium, called ICVL and made up of an Indian steel maker, iron ore miner and a utility"I've met a couple of the companies in ICVL and I am at a loss to understand the interest," Mallyon said.The full board of Riversdale recommended the Rio offer including the representative of Tata Steel, which owns 24% of Riversdale. Analysts said the recommedation did not mean Tata Steel was unreservedly backing the bid, but it did suggest that it is not planning its own rival offer.If Rio gets Riversdale it will get access to projects in Mozambique and South Africa, and a number of mines jointly owned with Tata Steel. "The acquisition of Riversdale is in line with our growth strategy of investing in, developing and operating large, long term, cost-competitive mines and businesses driven by the quality of each opportunity," Rio Tinto chief executive Energy, Doug Ritchie, said when it made the original offer.Tata Steel has already signed a supply agreement for 40% of the production from Riversdale's main Benga mine.Mallyon said negotiations were already underway to sell a large portion of the company's future coking coal to steelmakers in Brazil, Europe and possibly China.