Shares in Glencore (LON:GLEN) have been steady in today’s session, as rival Rio Tinto (LON:RIO) again snubbed the commodities giant’s offer for its Australian coal mines, picking China’s Yanzhou’s bid instead. The move came after Glencore submitted in improved offer on Friday.
As of 13:25 BST, Glencore’s share price had added 0.73 percent to 281.55p, largely in line with gains in the broader London market, with the benchmark FTSE 100 index currently 0.66 percent better off at 7,473.43 points. Rio Tinto’s share price meanwhile has added 0.97 percent to 3,082.00p.
Rio Tinto confirmed Yanzhou’s Australian subsidiary Yancoal as the preferred buyer of its Coal & Allied Industries in Australia in a statement, “given high level of completion certainty and a further improved offer of $2.69 billion”. The confirmation came after Glencore increased its bid on Friday, offering $2.68 billion for the assets, as well as offering to compensate the Anglo-Australian miner for each month of delay it took for it to acquire all the necessary approvals. A source close to Rio Tinto, however, told The Telegraph that these assurances contained a number of ‘conditionalities’ and did not ‘compensate sufficiently’.
“The revised offer from Yancoal of $2.69 billion offers compelling value to our shareholders for our Australian thermal coal assets,” Rio Tinto’s chief executive J-S Jacques commented in the statement. “This sale process has been in progress for a long period of time and we believe it is in the best interests of our shareholders to take the greater certainty of Yancoal’s strong proposal.”
The Telegraph notes that some commentators have suggested that Rio’s reluctance to sell its coal mines to Glencore stems from its desire not to antagonise its Chinese investors but the company has refuted this.