Rio Tinto moves closer to bid offer

Anglo-Australian miner Rio Tinto is fnalising a £2.4bn takeover bid for Africa-focussed riversdale, according to sources, upping an earlier offer as it seeks to gain key coking coal supplies amid soaring demand from india and China.

A formal bid for Mozambique based Riversdale Mining could spark a bidding war by drawing out other suitors wanting access to what is expected to be the world's second-largest coal exporting market in coming years.

A group of state-run indian firms has said it is looking at Riversdale

and other major mining companies are also interested, sources have said.

Rio Tinto was locked in talks with Australian-listed Riversdale's board over an A$16 per share takeover offer but a final deal has not yet been completed because of some last-minute wrangling over price, a source said.

An A$16 per share bid would be a 13.5 per cent premium to Riversdale's close on December 3 before news of Rio's interest was announced, but lower than its last trading price of A$16.30.

Shares of Riversdale, which said earlier this month it was talking to

Rio about a A$15 per share offer, were placed in a trading halt on

Tuesday.

Spokesmen for both riversdale and Rio Tinto declined to comment.

Rio, which is the world's number two iron ore miner, wants to bulk up on coking coal reserves.

Riversdale's large reserves have relatively low costs and are well

situated to serve China and India's markets.