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Rio Tinto Wins Ashton Battle, Now Eyes Aber and Dia Met - Dec.2000
Having won control of Ashton Mining, Rio Tinto is hungry
for control of two Canadian mining firms, possibly facing further showdowns with
De Beers, which lost Ashton and the resulting control of the Argyle mines. Rio Tinto won out the battle for Ashton after raising it’s offer in the eleventh hour and purchasing the Malaysian Mining Corp’s stake in the
Australian mining company. Though Rio’s second bid, at $2.20 per share, came
in less than De Beers’ $2.28 bid, De Beers ran into delays getting clearance
from the Australian Foreign Investment Review Board. The clinching of the deal
means that the Argyle mines, which produce smaller, low quality stones primarily
for the American mass market, remains free from De Beers’ global sales cartel.
With Rio Tinto assuming control of the Ashton shares in the mine, Argyle’s
independent marketing company will remain distributor of Argyle stones--a
lucrative prize that De Beers had hoped to capture. With the Ashton battle now behind them, the world’s two largest diamond
miners--De Beers and Rio Tinto, are both reportedly eyeing a 25% stake in Canada’s
Ekati mines and the Canadian mining firm Aber Diamond Corporation. Aber’s assets include a minority stake in the Snap Lake diamond project, the
majority of which is controlled by De Beers, and a minority stake in Canada’s
Diavik Diamond Mine, where Rio Tinto has the controlling share. In Canada’s northwest territories, meanwhile, a 25% share in BHP’s Ekati
mine is on the block after owner Dia Met announced itself for sale in October.
While De Beers had announced that it was not interested in acquiring Dia Met,
analysts speculate on a possible change of heart after De Beers lost the Ashton
deal to Rio Tinto. Another probable contender in the chase for Dia Met is BHP,
which has a controlling interest in Ekati. Ekati, which came into full
production last summer, accounts for about 5% of world diamond production,
producing high quality stones.Dia Met is on the market after two of its largest shareholders announced they
were seeking a buyer for their 38% stake in the company.v |
