Mining-giant emerges as white knight, igniting potential bidding war with Cameco Corp.
LONDON—Rio Tinto has emerged as a white-knight bidder for Hathor Exploration Ltd., potentially igniting a bidding war with Cameco Corp., which launched a hostile bid for the uranium explorer last month.
Hathor readily embraced Rio Tinto’s $578-million friendly bid after dismissing Cameco’s $520-million overture as predatory and too low.
The mining-giant seeks Hathor’s Roughrider Uranium deposit in northern Saskatchewan.
Hathor has previously valued the Roughrider deposit at between $769 million and $1.5 billion, a view dismissed by Cameco as overly optimistic.
Saskatoon-based Cameco employs about 1,600 people and produces about 16 per cent of the world’s uranium from its mines in Canada and the U.S.
Hathor’s board of directors has unanimously recommended shareholders accept the offer from Rio Tinto, which has major mining and refining operations in Canada, employing more than 13,000 people at 35 sites.
Although the Fukushima Dai-ichi nuclear plant in Japan was destroyed by a tsunami in March, creating the world’s worst atomic crisis since Chornobyl, many countries continue to develop their nuclear power industry.
With new plants planned in China, other parts of Asia and Europe, demand for uranium fuel used to power reactors is expected to grow.
Doug Ritchie, chief executive of Rio Tinto Energy, said the outlook for the global uranium market is bright.
“Canada is a country crucial to our business and growth plans and a location where Rio Tinto has a track record of delivering on major development projects to the benefit of the local community,” says Doug Ritchie, chief executive of Rio Tinto Energy. “This acquisition will allow us to build on the platform successfully laid out by Hathor and we will continue to draw on their expertise and commitment going forward,
Rio Tinto is one of the world’s major suppliers of aluminium, copper, diamonds, thermal and metallurgical coal, uranium, gold and industrial minerals.
In Canada, Rio Tinto owns the former Alcan—one of the world’s biggest aluminum producers—and controls Iron Ore Co. of Canada, this country’s biggest iron miner.
The global miner also controls the Diavik diamond project in the Northwest Territories and other businesses in Canada. It recently set up a partnership to explore for potash deposits in Saskatchewan.