Bloomberg Anywhere Remote Login Bloomberg Terminal Demo Request


Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.


Financial Products

Enterprise Products


Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000


Industry Products

Media Services

Follow Us

Hebei Group to Buy Rio’s Palabora Mining for $476 Million

Hebei Iron & Steel Group, China’s biggest steelmaker, will lead a group to buy Rio Tinto Group’s Palabora Mining Co. in South Africa for about $476 million as the Asian nation sucks up mining assets on the continent.

Rio will sell 57.7 percent for $373 million to the group, which includes Industrial Development Corp. of South Africa, the London-based mine operator said yesterday in a statement. Anglo American Plc will divest a 16.8 percent holding for 893 million rand ($103 million), it said separately. The agreement amounts to a purchase price of 110 rand a share, Hebei Iron said.

Palabora’s main asset is a copper mine in South Africa’s Limpopo province that also produces vermiculite and magnetite. China, the world’s biggest consumer of base metals, has added mining interests in Africa as it seeks resources to feed its expanding construction and automobile industries.

“Steelmakers are diversifying to mining as they are struggling to make profits in the steel business,” said Sarah Wang, a Shanghai-based analyst at Masterlink Securities Corp.

Hebei Iron & Steel Co., the publicly traded unit of Hebei Iron & Steel Group, rose 0.8 percent to 2.51 yuan in Shenzhen trading. Palabora fell 2 percent to 101 rand in Johannesburg after climbing 9.6 percent yesterday to the highest since July.

“South Africa offers significant long-term investment opportunities,” Hebei Steel Chairman Wang Yifang said yesterday in a statement released in Johannesburg. Calls to the mobile phone of Tian Zhiping, a Hebei vice president, went unanswered.

Slowing Demand

Hebei Iron & Steel Co., the holder of its parent’s steel assets, swung to a 26.1 million yuan ($4.2 million) loss in the third quarter as local overcapacity and weak demand cut prices.

South African and Chinese regulatory approval for the deal is expected to take four to six months, Anglo American said.

Palabora Mining has magnetite resources used in making steel, Mandla Mpangase, a spokesman at Industrial Development Corp., said by e-mail yesterday. The deal secures raw material for South African projects including the IMBS scrap-substitute project being built in Phalaborwa, Mpangase said.

Hebei Iron & Steel Group makes up 35 percent of the group of acquirers. General Nice Development Ltd., a closely held Chinese trader, has 25 percent, Industrial Corp. of South Africa 20 percent and China’s Tewoo Group another 20 percent.

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.