Tata Steel has increased its stake in Australian coking coal miner Riversdale Mining to 27.14 per cent from 24.2 per cent at an investment of around Rs 496 crore. This can derail rival, Anglo-Australian mining giant Rio Tinto plc's bid to acquire Riversdale.

Tata Steel increased its stake through market purchase by its subsidiary, Minerals Holdings Pte. The company has so far invested about Rs 1,942 crore to own 24.21 per cent in Riversdale.

As of March 1, the Tatas hold 64.23 million shares of Riversdale against 57.15 million shares held previously, according to Riversdale filing in the Australian Stock Exchange (ASE) on Wednesday.

Apart from the Tatas, Brazilian steelmaker Cia Siderurgica Nacional SA has also raised its stake in Riversdale to 17.58 per cent from 16.29 per cent.

Rio Tinto had made an offer to acquire ASE-listed Riversdale's stake at A$16 (Rs 750) a share, which would have resulted in an investment of $3.9 billion. The offer is valid till March 18 and subject to conditions including receipt of a minimum acceptance of more than 50 per cent. Rio Tinto owns about 17 per cent of Riversdale shares.

The move by the Tatas and the Brazilian steelmaker will bring Rio Tinto to the negotiating table as its plan cannot go through without acquiring their stake. With the sharp rise in coking coal and iron price, steel companies across the globe have been scouting for mineral assets.

Shares of Riversdale fell 3.4 per cent on the ASE on Wednesday to A$14.97, its lowest since Rio's December 6 offer. Tata Steel acquired the stake in Riversdale with an eye on jointly developing the company's coal projects in Mozambique and buying substantial coal from its mines in South Africa.

The $23-billion Tata Steel is among the top 10 global steel companies with an annual crude steel capacity of 27 million tonnes with operations in 26 countries and presence in 50.

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