Rio Tinto snatches victory in battle for Ashton mine

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The Independent Online

In a surprise coup, the Anglo-Australian mining giant Rio Tinto seized the advantage yesterday from its rival De Beers in the battle for Australia's Ashton Mining.

In a surprise coup, the Anglo-Australian mining giant Rio Tinto seized the advantage yesterday from its rival De Beers in the battle for Australia's Ashton Mining.

Rio revealed it had acquired 49.72 per cent of Ashton from the largest shareholder, Malaysia Mining Corporation, and increased its offer. Last month it declined to match De Beers' offer of A$2.28 per share for Ashton but yesterday it pushed its cash bid up 19 per cent to A$2.20 (80p) per share and said it would also offer Ashton shareholders one Rio share, or a share in the Australian quoted Rio Ltd, for every 14 Ashton shares.

Rio Tinto's shares closed up 18p at 1,127p in London.

The ownership of Ashton, which has a 40 per cent stake in the world's largest diamond mine, Argyle in Western Australia, has been the subject of a protracted contest between Rio and De Beers.

Rio's chief executive, Leigh Clifford, said yesterday he was pleased to have secured the interest. "This will ensure the continuation of the successful direct marketing arrangements and strengthen the future prospects of the Argyle diamond mine," he said.

De Beers conceded: "Receipt by Rio Tinto of valid acceptances for 49.82 per cent means that the De Beers offer is unlikely to be successful." The South African giant had raised its offer last month and appeared to have claimed victory but the bid was snagged by regulatory delays from Australian and Belgian authorities.

Rio, which owns 60 per cent of Argyle, already has the all-clear. Yesterday Charles Kernot, an analyst at BNP Paribas, said: "Malaysia hasn't wanted to wait to see whether De Beers gets the approval through. Rio has got the acceptance forms signed and delivered, so ... it's a done deal."

Rio also extended its offer yesterday to 13 November.

Analysts suggested Rio had recently switched its attention back to Argyle after studies of a similar diamond deposit in Guyana yielded disappointing results.

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