Glencore ups offer for Rio Tinto to $2.7bn

MINER and trader Glencore said it had submitted a higher offer to buy Australian miner Rio Tinto’s stake in Coal & Allied Industries Ltd for $2.675bn (€2.39bn) in cash, plus a coal-price-linked royalty.

The offer from Glencore, up from its previous $2.55bn (€2.28bn), comes three days after Rio Tinto selected Yancoal to buy its Coal & Allied division in Australia for $2.45bn (€2.19bn).

Glencore said the offer was at least $225m greater than Yancoal’s proposal and that the full $2.675bn cash consideration was payable in full on completion, with no deferred payments.

“Rio Tinto must provide Yancoal with the opportunity to present a counter offer. If any such counter offer is determined by the Rio Tinto board to be equally or no less favourable than the competing proposal, then Rio Tinto must accept the Yancoal counter offer,” Glencore said.

As recently reported in this newspaper, Glencore has re-started drilling at its Pallas Green prospect in Limerick.

The project had been put into abeyance for a number of years, but Glencore has moved eight rigs on to the site in recent weeks.

The company, which has had a turbulent run on the back of falling commodity prices and a large debt pile, recently declared “job done” on efforts to cut its debt.

A 2013 Glencore report said the site could potentially have 42 million tonnes of recoverable resources. Lead and zinc are present there.

The price of zinc has soared 70pc in the past 18 months, leading to a material uptick in activity in the Irish sector. Irish minerals explorer Unicorn Mineral Resources is in talks to sell itself to a Canadian-listed company, in a deal that could value it at some €7m. It is also considering listing in Canada via a reverse takeover of a cash shell.