rio accepts offer, page-13

Rio Tinto, China Guangdong Nuclear Power Corp, Kalahari Minerals, Extract Resources

Mining giant Rio Tinto has agreed to sell its stake in UK-listed Kalahari Minerals to suitor China Guangdong Nuclear Power Co and brought Australia’s Extract Resources very close to a downstream offer. Rio has handed over its 11.1 per cent stake in Kalahari, which gives Guangdong a 40.5 per cent share. If acceptances hit 50 per cent, Guangdong is set to deliver a $2.2 billion downstream offer to Extract Resources, which Kalahari has a 43 per cent interest in.

The question now is whether Rio will hand over its 14 per cent stake in Extract if Guangdong wins Kalahari? The real target is the Husab uranium project in Namibia, thought to be one of the largest in the world. Rio has some nearby assets that are maturing and one theory is that they will be somehow involved in any deal with Guangdong. Rio simply said in its statement that it would decide whether to accept an offer for Extract “in due course”. This isn’t necessarily Rio playing funny buggers; there’s little point committing to a takeover offer that doesn’t exist yet.