Rio Tinto NSW coal mines on Glencore’s radar
Could Glencore take over Rio Tinto’s NSW mining domination?
Rio Tinto coal mines located in NSW could be under scrutiny from mining giant Glencore.
Rumours are rife of Glencore executives making enquiries as to purchasing coal assets in the state.
Our information tells us that discussions have been more frequent between Glencore and Rio Tinto of late since the initial move on Rio’s coal assets was made in June 2015.
A significant amount of coal mines are scattered across the NSW Hunter Valley region, with Glencore already owning a large swag of mines in the ‘valley’. As is typical of large mining company asset growth, the Glencore approach is nothing out of the ordinary as larger organisations with the right infrastructure, finance and sales processes make a play for flagging coal mine.
Squeezing out the competition
This is one way to beef up the presence in any region and dominate the supply market – effectively squeezing out the competition.
“How we`ll get and how soon we can reach an agreement, I don`t know, but it`s something that clearly makes a lot of economic sense”, he said.
“In the Hunter Valley assets there`s a lot to be done where we can get substantial synergies, so we`re talking to Rio Tinto, but it takes time for both sides to assess each other`s assets.”
Although the two mining companies have been talking to one another, it’s not all plain sailing. Rio are keeping a tight hold on their assets because only in October 2014, Rio pushed aside a merger deal with Glencore, indicating the global mining company is not prepared to give away too much of its power to arch rival Glencore.
For the moment, a merger is simply speculation.
iMINCO will follow closely, the developments of the Rio Tinto Glencore NSW coal mine takeover. Who knows, Glencore could buy Rio Tinto coal mines in Australia – time will tell.