its now or never for rio

Glencore International Plc and Rio Tinto Group are among miners buying out companies in which they own stakes during the downturn in equity markets. Katanga Mining Ltd. (KAT) and Extract Resources Ltd. may be the next targets, said Liberum Capital Ltd. and Ord Minnett Ltd.

Mining companies have spent $15 billion this year boosting their stakes in companies, with this quarter the strongest for deals in the last four, according to data compiled by Bloomberg. In the midst of a four-week global equity rout that wiped about $8 trillion of market value, Rio and Mitsubishi Corp. (8058) today raised their bid for Coal & Allied Industries Ltd. to A$1.53 billion ($1.6 billion) after Glencore offered to buy Minara Resources Ltd. (MRE) on Aug. 24.

?Those companies that have cash on their balance sheet and have that strength are taking advantage of this market volatility,? BlackRock Inc.?s Catherine Raw, who helps manage the $17 billion World Mining Fund, told Andrea Catherwood on Bloomberg Television?s ?Last Word? program, citing Rio?s offer for Coal & Allied.

Glencore, the world?s largest publicly traded commodity trader, will buy more assets, Chief Executive Officer Ivan Glasenberg said yesterday. This week he offered A$270 million in cash to buy the shares in Australian nickel producer Minara Glencore doesn?t already own. The offer was made after Minara plunged 34 percent from its January peak this year of 97 cents.

?Obvious? Target
The Baar, Switzerland-based company also owns 39.6 percent of Century Aluminum Co. (CENX) after buying 503,343 shares this month, according to data compiled by Bloomberg. It also holds a 74 percent stake in Katanga Mining Ltd., through its company Jangleglade Ltd., and 34.4 percent of Xstrata Plc. (XTA) Katanga is down 37 percent from its peak of C$2.17 ($2.19) in April.

?Within the existing portfolio the obvious name to replicate the Minara transaction is Katanga,? Dominic O?Kane, a London-based mining analyst at Liberum, said by phone. ?They own 74 percent and in time we believe there would be an obvious strategic desire to take outright ownership.? A call to the office of Bermuda-based Katanga?s Chief Executive Officer John Ross was unanswered. Glencore spokesman Simon Buerk declined to comment.

Glencore?s stake in Xstrata ?is probably a longer-term play, but it will have to be resolved one day,? Peter Arden, a senior research analyst at Ord Minnett, said from Melbourne. Extract Resources Ltd. (EXT), aiming to develop the world?s third- largest uranium mine, may also be a target for Rio, he said. It?s down 25 percent from its March high. Extract Chief Executive Officer Jonathan Leslie didn?t immediately return calls to his London office.

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