Rio Tinto, the world's second-largest mining company, still needs to shore up more support to acquire Australia's Riversdale Mining as the deadline for the $4 billion bid draws near. Rio raised its offer almost three weeks ago in an effort to ward off threats from steelmakers that already own stakes in Riversdale.
Rio said on Monday that it received support from 39.66% of Riversdale's shares, up from 38.38% a week ago, but that is still short of the 50% that Rio is hoping to obtain. Rio has raised its offer to $4 billion several weeks ago and has extended its deadline for the deal four times since making its initial offer in December.
Rio (RIO) is looking to gain access to Riversdale's developing coal mines in Mozambique at a time when coking coal prices are soaring due to rising demand from Chinese and Indian steelmakers.
Brazil's Companhia Siderurgica Nacional (SID) and India's Tata Steel recently boosted their stakes in Riversdale to enhance their position in negotiating coking coal contracts. Tata Steel owns 27.1% of Riversdale and CSN owns 19.9%.
Analysts have said that Riversdale makes for an attractive target for Rio because Rio currently lacks exposure to coking coal in its coal portfolio.