Rio Tinto has doubled its holding in Richards Bay Minerals following the completion of its acquisition of BHP Billiton's entire interests. The purchase price paid by Rio Tinto on completion was USD 1.7 billion.

The acquisition price was USD 1.9 billion before contractual adjustments for cash payments made by RBM to BHP Billiton since the effective transaction date of 1 February 2012. This price includes USD 0.6 billion for BHP Billiton's 37% equity interest in RBM, USD 1.0 billion for a 50% interest in outstanding RBM shareholder financing arrangements, and USD 0.3 billion for a royalty stream.

The acquisition was triggered on February 1st 2012 by BHP Billiton exercising a put option agreed with Rio Tinto as part of RBM's restructuring in 2009. The price was determined through a previously agreed expert valuation process.

Mr Alan Davies Rio Tinto Diamonds & Minerals Chief executive said that "Doubling our stake in this tier one asset further strengthens Rio Tinto's titanium dioxide portfolio at a time when the long-term outlook remains robust. Demand for feedstocks is expected to grow strongly, needing the equivalent of a new operation the size of RBM to be built every two and a half years."

RBM is a South African mineral sands mining and processing operation located in Kwa-Zulu Natal. It is one of the world's lowest cost producers and has mineral resources to support 20 years of production. Rio Tinto manages the RBM business and markets all of its products.

Source - Rio Tinto

(www.steelguru.com)