says rival miner Anglo American Alex MacDonald From: Dow Jones Newswires April 22, 2011 10:42AM Increase Text SizeDecrease Text SizePrintEmail Share
THE chairman of Anglo American says rival mining giant Rio Tinto is paying a high price for its acquisition of Riversdale Mining. John Parker said Anglo American looked at making an offer for Mozambique-focused Riversdale but didn't think it was in the interest of shareholders to make an offer.
"We looked and didn't think it was in shareholder interest," Mr Parker said.
"There were serious issues about transportation."
He also said that Rio Tinto, which has made an offer to purchase all of Riversdale's shares in a deal that values the company at almost $US4 billion ($3.7bn), is paying a high price.
Rio has so far secured a 72 per cent interest in Riversdale.
Riversdale has identified 13 billion tonnes of coal at its Benga and Zambeze projects in the Tete basin of Mozambique.
. . The area has attracted the attention of mining and steel companies on the promise it could rival Australia's coal-rich Bowen Basin in the production of coking coal, a key ingredient used in steelmaking.
Riversdale plans to export coal from its Benga project in Mozambique for the first time this year, transporting it by rail to the port of Beira, but there have been issues with the timetable for completion of the railway line.
Riversdale is also considering barging the coal down the Zambezi river.
Mr Parker also said that while the company is willing to consider mergers and acquisitions, "there are very few transformational deals" available, adding that the company saw better value from growing output organically.
RIV Price at posting:
$16.71 Sentiment: None Disclosure: Not Held
