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Tata Steel on Friday said it will stay put in Riversdale even though mining giant Rio Tinto has assumed control of the Mozambique—focused miner.
“No change, we are there,” pat came the reply from Tata Steel Vice Chairman Mr B Muthuraman when asked whether the steel major would change its stance after Rio acquired over 50 per cent stake in Riversdale.
Earlier in the day, Rio announced acquisition of majority stake in Riversdale and maintained that its holding might go up further since the takeover offer would remain open till April 20.
Tata Steel and Brazil’s steel making firm CSN that hold 27.14 per cent and 19.9 per cent stake, respectively, were trying to boost their positions in Riversdale by increasing stakes since the Australian firm first became a takeover target by Rio in December last year.
Tata Steel and CSN have maintained in the past that they were more interested in getting coal than just making a quick buck from Riversdale, which has an estimated 13 billion tonnes thermal coal reserves in two projects in Mozambique.
Tata Steel Group, which has over 28 million tonnes per annum steel making capacity now, needs to have coking coal, an important steel making raw material, to feed its operations across geographies.
Within India also, Tata Steel is enhancing steel making capacity to 10 million tonnes per annum at its Jamshedpur facility from 6.8 mtpa now.
Meanwhile, Rio has sweetened its open offer to Riversdale shareholders to AUD 16.50 per share following the acquisition of the targetted 47 per cent stake in the company at AUD 16 a share.
“This is an exciting day for Rio Tinto and Riversdale. The new Riversdale Board will reflect our majority shareholding and help clear the way for the development of Riversdale’s assets as quickly as possible,” Mr Doug Ritchie, Chief Executive, Rio Tinto Energy said in a statement.
“The growth prospects for the Riversdale assets are considerable. We remain optimistic about the outlook for the global coking coal market. This is a great opportunity for our business to deliver on the development of a large—scale coking coal resource,” he added.
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