Glencore Said to Renew Interest in Rio Canada Iron Assets
Glencore Xstrata Plc (GLEN), the fourth-largest mining company, revived its interest in bidding for the Canadian iron-ore operations that Rio Tinto Group is seeking to sell, according to two people familiar with situation.
Glencore resumed talks with Rio as it studies a possible bid, said the people, who asked not to be identified as the discussions are confidential. Earlier interest from Baar, Switzerland-based Glencore and other parties had waned and Rio was close to pulling the sale, one of the people said.
The 59 percent stake in Iron Ore Co. of Canada is among assets that London-based Rio is trying to sell as it focuses on its most profitable operations. The interest may be valued at as much as $3.5 billion, Credit Suisse Group AG analysts said in June. Rio, the second-biggest mining company, hired Credit Suisse and Canadian Imperial Bank of Commerce to sell all or part of the stake, a person familiar with the matter said in March.
China Minmetals Corp., the nation’s largest state-owned metals trader, is likely to drop out of the bidding, two people with knowledge of the matter said in October. Minmetals considered Rio’s asking price too high and decided to focus more on its bid for a Glencore copper project in Peru, one of the people said at the time.
Teck Resources Ltd., Canada’s largest base-metals producer, also is considering abandoning its bid for the Rio unit because of a wide valuation gap, two people familiar with the matter said in October.
Iron Ore Co. operations are located in Labrador City, Newfoundland and Labrador, Canada’s easternmost province. About a quarter of its output is shipped to steel mills in Asia, the Pacific region and the Middle East. Its owns a 420-kilometer (261-mile) railway and port on the Gulf of St. Lawrence.
Peter Grauer, the chairman of Bloomberg LP, the parent of Bloomberg News, is a non-executive director of Glencore Xstrata.
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