SAIL to lead Indian charge for iron ore mine acquisition in Afghan

Sunday, 21 Aug 2011

It is reported that Steel Authority of India Limited along with three public sector units and three private sector companies are to form a consortium to submit the final bid for the Hajigak iron ore mines in Afghanistan estimated to have reserves of around 1.8 billion tonnes.

This is the first time that consortium of public and private firms are teaming up to bid for a mining asset abroad.

Mr CS Verma chairman of SAIL said the three public sector units would be National Mineral Development Corporation, the Rashtriya Ispat Nigam Limited and SAIL, though he deferred naming the private companies that would bid for the mine.

Mr Verma said that "This will be a watershed event in public and private partnership.”

He preferred not to comment on the valuation of the mines, citing confidentiality clauses embedded in the deal.

The Hajigak deposits, located in the mountainous Bamiyan province, 130 kilometre West of Kabul, are among the biggest untapped reserves in the world with high quality magnetite with 63% iron content. According to reports, the Afghanistan government has estimated that the project will require investments of about USD 3 billion over a 30 year period, with the government allowing the entire output from the mines to be exported.

The Afghanistan government had recently extended the deadline for bidding to September 4 from it earlier August 2 deadlines. It has already indicated its preference for companies which would offer development plans from mining of iron ore to vertically integrated processes, including making of steel.

Besides SAIL and NMDC, other Indian companies like TATA Steel, JSW, Jindal Steel and Power, Bhushan Steel and Monnet Ispat are among the 15 Indian firms that have been shortlisted by the Afghanistan government.

(Sourced Mineweb.com)

Rio Tinto sweetens Riversdale bid to break stalemate

Thu Mar 10, 2011 1:18am GMT
* Offer raised to A$16.50 per share from A$16
* Rio maintains 50% acceptance limit for bid to go ahead
* Riversdale shares fall, 9 percent below offer value
* Rio says offer is final if no competing bids

MELBOURNE, March 10 (Reuters) - Global miner Rio Tinto raised its offer for Mozambique-focused coal miner Riversdale Mining to $3.9 billion in a final bid to woo key shareholders who have held up the deal and gain control of coveted coal assets.

Investors doubted the move would be enough to secure the 50.1 percent acceptances Rio wants and sent Riversdale's shares down as much as 2.4 percent.

"The market's clearly a bit skeptical that it will get across the line," said Peter Chilton, an analyst at Constellation Capital Management, which owns shares in Rio Tinto.

Rio Tinto raised its offer price by 3 percent to A$16.50 per share on Thursday and extended the offer period for the third time, to April 1, but said the new offer was its final one if there were no competing offers.

Standing in Rio's way are India's Tata Steel , the world's No. 7 steelmaker, and top Brazilian steel producer CSN , who have increased their stakes in Riversdale since the bid and now hold a combined 47 percent.

Without their support, Rio would need nearly 100 percent acceptances from the rest of Riversdale's shareholders to get majority control.

"It's going to be quite hard," Chilton said.

As of March 4, Rio Tinto only had acceptances on 17.9 percent of Riversdale's shares.

Tata Steel and CSN have both said they are mainly interested in securing coking coal from Riversdale. Tata, which already has a stake in Riversdale's Benga coking coal project in Mozambique, has said it was talking to Rio about a range of options.

CSN has not publicly revealed its intention over the Riversdale stake or about its possible talks with Rio Tinto.

Analysts said the two companies would probably like to see Rio Tinto, with deeper pockets and more technological skills than Riversdale, developing Riversdale's Mozambique mines and infrastructure.

"There is no question that Rio Tinto's expertise is crucial to overcoming the development challenges of Riversdale's projects," Rio Tinto Energy chief executive Doug Ritchie said in a statement.

If Rio did not take over Riversdale, shareholders would be likely to face big equity raisings by Riversdale to help fund the development of its coking coal projects.

"It's difficult to see that Tata Steel and the Brazilians really want to be involved in what would be very expensive coal development projects," Chilton said.

Complicating talks is China's third-largest steel maker, Wuhan Iron and Steel Corp , which had an agreement to buy a 40 percent stake in Riversdale's Zambeze coal project in Mozambique, with rights to coal supply from Zambeze and Riversdale's other key project, Benga.

Riversdale's shares last traded down 0.5 percent at A$15.05, about 9 percent below the offer price, after touching a low of A$14.77. Rio's shares fell 1.5 percent in a broader market that was down 0.8 percent. (Reporting by Sonali Paul and Balazs Koranyi; Editing by Ed Davies and Dhara Ranasinghe)

Riversdale CEO sees growing institutional support for Rio Tinto offer

Thursday 10 March 2011, 10:17 AM

MELBOURNE (Reuters) - Institutional shareholders in Riversdale Mining (ASX:RIV.AX) are moving toward backing global miner Rio Tinto's sweetened A$3.9 billion takeover offer for the Mozambique-focused coal miner, Riversdale's chief executive said on Thursday.

Rio Tinto raised its offer to A$16.50 a share on Thursday in a final bid to woo key shareholders who have held up the deal, and extended the offer for a third time, to April 1.

"I can say that from the institutional calls that I've made in the last few hours, that there's some growing support for Rio Tinto," Riversdale Chief Executive Steve Mallyon told Reuters.

(Reporting by Sonali Paul; Editing by Balazs Koranyi,sourced:Thomson Reuters)