12 Jun Glencore initiates bidding war for Rio Tinto Australian coal assets
An unexpected bidding war is set to play out for Rio Tinto’s Coal & Allied assets in Australia, as Glencore came in with a bid of US$2.55 billion for the Hunter Valley coal mining division.
Chinese-controlled firm Yancoal Australia submitted a successful bid of $2.45 billion for the coal mines in January, however Swiss-owned Glencore has increased this figure by $100 million in its bid.
“The Rio Tinto board and management will give the proposal appropriate consideration and respond in due course,” said the world’s second largest miner.
Glencore will also pay $920 million for Mitsubishi’s minority stakes in some of the mines if the Rio bid is accepted. The multi-focused miner operates 18 open-cut and underground coal mines in Australia.
In a statement, the firm said: “Glencore’s combined portfolio of mines in the Hunter Valley would have production capacity of 81 million tonnes per annum of high-energy coal that feeds increasing Asian demand for high-efficiency, low-emission coal.”
Rio must provide Yancoal with the opportunity to present a counter offer.