Rinker Not Afraid Of GreeniesMarch 29 2006 - Australasian...

Rinker Not Afraid Of Greenies
March 29 2006 - Australasian Investment Review – (AIR)

Cement supplier Rinker (RIN) has run into a spot of bother with environmentalists in Florida. The result is a court-ordered review of the environmental impact of mining for aggregates in Florida’s Lake Belt. Army engineers will conduct the investigation.

Deutsche Bank reports the vast majority of southern Florida’s aggregate resource is located in the Lake Belt district. Current mining permits were granted for 10 years in 2002. Environmental protest is something the Lake Belt is well used to.

Rinker is not concerned and Deutsche’s analysts concur. Firstly, there is too much economic importance inherent in the Lake Belt, which is hardly an argument that would placate a greenie, but is a likely fact of life in this day and age. Secondly, Deutsche notes the district was set aside for mining purposes for 50 years in 1999. Rinker believes there is little material risk of its licences being rescinded.

In the meantime, Deutsche has upgraded its Rinker valuation to bring it in line with US peer multiples of 19x. This takes the analysts’ 12-month target from $19.02 to $22.23.