Rio Tinto’s sale of its coal assets at the New South Wales region of Australia has come in a tug-of-war between the Switzerland-headquartered Glencore and China’s Yancoal.
Driven by the long desire to integrate its existing coal operations at the Hunter Valley in Australia with that of Rio Tinto’s, Glencore has raised its bid offer to USD 2.55 billion; while, its competitor, Yancoal, offered USD 2.45 billion. The board of the seller will meet in the coming days to discuss the merits of Glencore’s offer vis-à-vis that of the rival.
The outbreak of the bidding war also demonstrates the persistence of interests in Thermal Coal despite the widespread voices on the environmental impacts of the coal.
However, Glencore will face more regulatory hurdles than Yancoal even if the Swiss miner bags the deal. Among the hurdles, it will have to win approval of the China’s Ministry of Commerce and the Australian Competition and Commerce Commission.
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