Glencore Said to Study Bid for Rio’s Canada Iron Ore OperationsJesse Riseborough
Glencore Xstrata Plc, the world’s fourth-largest mining company, is studying a bid for the Canadian iron ore operations Rio Tinto Group is seeking to sell, according to two people familiar with situation.
Glencore’s interest is at an early stage and there’s no certainty it will submit a formal bid, one of the people said, declining to be identified as the matter is confidential. Spokesmen for Rio Tinto and Glencore declined to comment.
Rio hired Credit Suisse Group AG and Canadian Imperial Bank of Commerce to sell all or part of its 59 percent stake in Iron Ore Co. of Canada, a person familiar with the matter said in March. Deutsche Bank AG analysts valued the stake at $1.8 billion, in a March 8 note.
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.
The Wall Street Journal reported Glencore’s interest earlier.
Glencore completed the all-share $29 billion takeover of Xstrata Plc last month to add coal, copper, zinc and nickel mines to its commodities trading operations. The company invested in Brazil’s Ferrous Resources Ltd. in February, its first investment in a producing iron ore asset.
Rio Tinto is seeking to dispose of more mining operations after selling more than 20 assets for $12 billion to help cut debt. IOC’s reserves are sufficient for more than 20 years at current production rates, according to Rio’s website.
Rio advanced 0.8 percent to 2,880 pence by the close in London.