Indian steel giant Tata Steel made a statement on December 7, pointing out that it views Australian Stock Exchange-listed mining company Riversdale Mining Limited (RML) as a valuable strategic investment and continues to be interested in developing the tenements of the company.
The release came following a RML statement announcing that it has received a takeover offer from giant Australian miner Rio Tinto. RML and Rio Tinto have already commenced negotiations with a view to a possible deal. It is reported that Rio Tinto's preliminary offer for each share of RML is AU$15. The total acquisition price quoted by Rio Tinto is AU$3.5 billion (approximately $3.48 billion).
RML owns large coal mines in Mozambique and has become a target for global miners. Riversdale's assets include the Benga project and the neighbouring Zambezi project in Mozambique which has high quality coking coal.
Meanwhile, Indian newspaper Economic Times said on December 9 that Tata Steel could team up with an Indian metals company or a miner to make a counterbid for Riversdale Mining, in response to Rio Tinto's offer.
Due to the high cost of the bid, Tata Steel will explore making a joint bid with state-owned mining company NMDC, which had earlier expressed interest in buying 10 percent in Riversdale, or with SAIL, with which Tata Steel already has an agreement for sourcing raw materials locally, Economic Times said.
"Tata Steel will continue to monitor the situation and will take appropriate action as deemed necessary," Tata Steel statement said.