Rio Tinto Moves To Compulsory Acquisition Of Riversdale

Rio Tinto PLC (RIO) said Friday it moved to a compulsory acquisition of the few outstanding shares in Africa-focused coal producer Riversdale Mining Ltd. (RIV.AU), having now secured a more than 99% stake after India's Tata Steel Ltd. (500470.BY) surrendered its shareholding to the bid.

Rio has already begun integrating Riversdale into its operations, taking control of a colliery in South Africa and a significant developing coking coal deposit in Mozambique that will be able to feed rising demand for the raw steelmaking commodity in rapidly industrializing Asian countries, particularly China.

Tata late Thursday said it had decided to sell its slightly more than 26% interest in Sydney-based Riversdale for about A$1.06 billion (US$1.1 billion) so that it wouldn't remain an investor in a soon-to-be-delisted company.

Rio launched its offer for Riversdale in December, but was prompted to repeatedly extend the deadline for the bid and raise the offer price to A$16.50 a share because of a slow acceptance by the coal comapany's shareholders. Brazilian steelmaker Cia. Siderurgica Nacional SA (SID) sold its about 19% stake in Riversdale in April, pushing Rio toward majority ownership and plans to delist Riversdale in Australia.

"This is a great outcome for Rio Tinto," said Doug Ritchie, chief executive of the company's energy division.

The offer, which values Riversdale at close to US$4 billion, is set to close late Friday.

Riversdale is developing two projects in Mozambqie and expects its Benga mine to produce its first coal for export before the end of the year. Tata is a partner in Benga and has an agreement for 40% of the coking coal produced by the mine. Commodities trader Trafigura this month struck a deal worth more than US$200 million to buy all thermal coal produced at Benga.

-By Robb M. Stewart, Dow Jones Newswires; [phone]; [e-mail]