Anglo American fights Rio Tinto in global race for coal reserves
The global battle for control of the world’s natural resources flared again when it emerged that Anglo American could gatecrash Rio Tinto‘s plans to buy Riversdale Mining, the Australian coking coal group, for £2.5bn.
Headed by chief executive Cynthia Carroll and chairman Sir John Parker, Anglo has joined a list of possible counter-bidders for Riversdale, whose African business produces coal for the fast-growing Asian steel industry.
Evidence of the importance of coking coal to China surfaced recently when Riversdale signed an agreement with Wuhan Iron and Steel to jointly develop Riversdale’s huge Zambeze coal reserves in Mozambique.
Last month, Anglo said it was focusing on its coking coal interests in Australia and hinted that it was in the market for overseas expansion. The company is disposing of assets such as zinc, and concentrating on minerals that offer more lucrative returns. Anglo, which is believed to have appointed Morgan Stanley to advise on its options, will face stiff competition, with the Wall Street Journal reporting that Tata Steel of India, which controls 24% of Riversdale, is considering an offer.
Another potential bidder is ICVL, an Indian consortium that has appointed Citigroup as a financial adviser and mandated the bank to report back on the viability of a bid that would top Rio’s promise of A$16 a share.
Rio’s move, which has been approved by Australian group’s board, has raised eyebrows among some shareholders, as the acquisition of Riversdale would take the UK company into African coal markets, where it has little experience.
Anglo’s interest has surprised some observers who had thought it was too busy with its streamlining operations to get involved in mergers and acquisitions. Anglo accelerated its corporate overhaul after rebuffing a merger approach from Xstrata in 2009.
flare: burn brightly, get worse, make wider
stiff : severe, firm
QUESTIONS FOR DEBATE:
1: Why is Anglo American fighting to purchase the Riversdale and what it is doing to acquire it?
2: Why is it said that Anglo will face stiff competition in order to buy Riversdale Mining?
Talking about Grammar: Past Perfect
We use the Past Perfect when we are already talking about the past, and we want to go back to an earlier past time. For instance:
“Anglo’s interest has surprised some observers who had thought it was too busy with its streamlining operations to get involved in mergers and acquisitions.”
Past Perfect Structure: Subject + HAD + Past Participle