dj tata steel may form alliance , page-3

A barging announcement should be due soon and will add to share value IMO. But wait ...

NMDC decision on Riversdale bid by month end

Published 5:39 PM, 14 Dec 2010 Last update 9:11 PM, 14 Dec 2010 Reuters, with AAP

A consortium of five Indian state-run firms will take a decision on bidding for Riversdale Mining Ltd by the end of this month, a senior official of state-run iron ore miner NMDC said.

International Coal Ventures (ICVL), a consortium of five Indian state-run companies including Steel Authority of India and NMDC, may bid for Riversdale, the Business Standard had reported.

"ICVL is considering the entire issue," the NMDC official, who declined to be named as the move was not public yet, said.

Miner Rio Tinto Ltd made a $3.5 billion bid approach for Africa-focused Riversdale Mining earlier this month, setting up a potential takeover battle, but told Riversdale it was not in a position to make a bid.

India's steel ministry asked the consortium to consider the bid, the chairman of state-run power producer NTPC said.

"I have been told ICVL has been asked to make all possible effort to bid for Riversdale," NTPC Chairman Arup Roy Choudhury told reporters.

Other companies planning a bid for the Australian firm as part of the consortium are iron ore miner NMDC , power producer NTPC and Rashtriya Ispat Nigam Limited, the newspaper said.

Riversdale had no immediate comment on the report.

"Bidding for Riversdale is beyond our personal capacity and authorised limits," the Business Standard quoted NMDC chairman Rana Som as saying.

"Hence, we have referred the proposition to ICVL," he said, referring to the International Coal Ventures.

"It is a good project with sizeable reserves, but has a few negatives like logistics cost too."

Steel Authority Chairman C.S. Verma told the newspaper that a proposal had been placed with International Coal Ventures.

Officials at the state-run companies could not immediately be reached by Reuters for comment.

Steelmaker ArcelorMittal, Xstrata Plc, Arcelor and Anglo American are also expected to take a look at Riversdale, according to sources familiar with the company, although no formal bids or approaches have been received so far.

Riversdale's shareholder base remains the main obstacle to a successful takeover, sources said.

Private-sector Tata Steel is one of the major shareholders in Riversdale, owning about 24 per cent in the company.

Other major shareholders include Brazilian steelmaker CSN and US investment firm Passport Capital.

It was safe to assume Rio Tinto was talking to Riversdale's major shareholders such as Tata about a joint bid although nothing has been formalised, they said.

"Indian companies need to go out and acquire overseas natural resources assets to meet the growing domestic demand, but so far they have been slower than the Chinese firms in doing deals," Helsinki-based portfolio manager at FIM India Taina Erajuuri said.

"For Indian companies, price of the asset will be a key factor and the valuations of natural resources assets globally are not cheap," she said.


FIM India holds $150 million worth of Indian shares including Coal India , which is also part of the consortium along with iron ore miner NMDC and Rashtriya Ispat Nigam Ltd.

Riversdale is 24.2 per cent owned by India's Tata Steel and controls an anthracite colliery in South Africa.

Shares in Riversdale closed at $16.23 on Tuesday, up 23 cents, or 1.44 per cent, valuing the company at $3.83 billion.