A consortium of five public sector undertakings, International Coal Ventures Ltd (ICVL), on Tuesday threw its hat in the ring to acquire Australia’s Riversdale Mining company in a global battle.
The consortium consists of steelmakers Steel Authority of India Ltd and Rashtriya Ispat Nigam Ltd, miners National Mineral Development Corporation and Coal India Ltd and power company National Thermal Power Corporation, and has a war chest of over $2 billion (R9,000 crore) at its disposal for overseas acquisitions but with a track record of no success since 2009 when it was set up, it may draw a blank here as well.
“We have discussed the proposal and put it before the board for examination,” said Rana Som, chairman, NMDC, country largest iron ore miner. “A final call will be taken by end January.”
It may be too late by then. The front runner Rio Tinto has already upped its bid to $3.8 billion and the reports suggested it may go well beyond $4 billion in the days to come. Others in the fray include Tata Steel, which has a 24% stake in the firm. Rio's Brazilian rival Vale is also expected to join the battle as would world’ s largest steelmaker ArcelorMittal.
Riversdale's coal reserves in Benza and Zambeza are among world's largest reserves of untapped coking and thermal coal. Tata Steel has a 35% in Riversdale’s Benga Coal project in Mozambique with a 40% offtake agreement. The company has always maintained it was a strategic investment but is widely expected to make a counter bid to the Rio offer.