Riversdale linked to takeover speculation

SYDNEY-based coal miner Riversdale Mining has been linked to a potential takeover bid from India’s Tata Power, which is scouring the world for coal supplies.

Staff Reporter

A Dow Jones Newswires report out of New Delhi said officials from Tata were recently seen in Mozambique, where Riversdale holds highly prospective ground immediately next to a giant coal development owned by Brazil’s CVRD.

From 2012, Tata will need to import around 12 million tonnes of coal per annum to feed its western Indian power project, and is currently looking to buy coal mines overseas and arrange coal imports.

“With the east coast of Africa being only five shipping days from India and both CVRD and Riversdale having enough coal to supply them with well over 12 million tonnes per year, a tie-up would make sense,” the Dow Jones Newswires report said.

“With a market cap of less than $300 million, Riversdale could be vulnerable.”

Riversdale also operates the Zululand anthracite colliery in South Africa, which produced 157,399t in the 2006 September quarter. The mine has sufficient resources to support a 17-year mine life.

Shares in Riversdale, which were trading at less than 85c each 12 months ago, were steady at $2.13 in afternoon trade today.