Commodity giant Glencore throws hat in for Rio Tinto's coal mines

Shares in global copper and mining titan Rio Tinto plc (LOIN:RIO) nudged higher in early afternoon London trade as a potential bidding war for the group’s Australian coal business heated up.

Chinese miner Yanzhou Coal Mining Co told investors that its $2.45bn deal to buy a large part of the business had received regulatory approvals from Chinese authorities.

Coal & Allied includes Rio’s massive operation in Australia’s Hunter Valley and its Mount Thorley Warkworth mines.  They produce thermal coal, used in power generation, a sector under pressure in the light of more environmentally friendly methods.

But on Friday, commodity behemoth Glencore (LON:GLEN) threw its hat in the ring with  a $2.5 billion  counter bid, which is reportedly fully financed.

Commentators say the Glencore offer demonstrates a renewed appetite for deals from boss Ivan Glasenberg after a period of share price weakness.

If successful, Glencore has said it would explore selling up to a 50% stake in the business and look to sell other of its coal assets.

Yanzhou Coal has noted Glencore PLC’s bid, saying it will have a right to match a superior offer.

The acquisition of Rio Tinto’s Coal & Allied Industries through Yanzhou  Australian subsidiary has already got the green light from Australia’s Foreign Investment Review Board.

Glencore shares added 0.29% to 295.85p in early afternoon London deals.

Story by ProactiveInvestors