Tata Steel exits Riversdale with A$1 billion stake sale
16 Jun 2011
Tata Steel today said it had sold its 26.27 per cent stake in Australian coal miner Riversdale to global mining major Rio Tinto for A$1.06 billion. "The sale consideration of approx A$1,060 million (about Rs5,074 crore) represents around 100 per cent appreciation of value in less than four years since the first investment," the steel major said in a statement.
Tata Steel would, however, keep its 35 per cent stake in a Riversdale unit that owns coal assets in Mozambique and would discuss ways to enhance participation in the Benga joint venture, the company said in a statement.
The Anglo-Australian miner Rio Tinto has a 73.2 per cent stake in Riversdale, which is estimated to hold reserves of 13 billion tonnes in its two projects in Mozambique - Benga and Zambeze.
Tata had consistently maintained it would hold on to the Riversdale stake supplies for coal were critical for its European steel making operations, which account for almost two-thirds of its 28 million tonnes global capacity.
Riversdale has, since December 2010, been a target of takeover for Rio Tinto. It had bid A$16 per share to acquire a majority stake in the Australian mining company.
Tata Steel and Brazilian steel maker CSN had all along been opposed to Rio buying Riversdale, maintaining that it was more interested in getting coal from Riversdale to feed its European operations than making a quick buck.