Rio Tinto Eyes Equinox Minerals
Published on February 16, 2011 at 5:37 PM
By Joel Scanlon
Rio Tinto may be focusing on Equinox Minerals as a takeover target. The mining giant is said to be looking at small to medium sized new acquisitions may be happy to get the pure copper play as per analysts at the Royal Bank of Scotland.
Equinox Minerals is a mining and exploration company with corporate offices in Perth, Australia and Toronto, Canada. It has operations in Peru, Australia and Zambia but most of its current activity is concentrated in Zambia where through subsidiary the Lumwana Mining Company, it operates mines in the Zambian copperbelt region.
In a research note Lyndon Fagan said that Equinox was one of the few pure copper plays out there and that it would be a logical fit for the diversified, British-Australian, multinational mining and resources group.
With the decline in copper grades across Rio Tinto mining operations worldwide, Mr Fagan said that the company would need more copper projects to maintain its production levels. Since its bid for Riversdale Mining, the company is obviously open to investing in Africa to further its growth prospects.
Equinox is a dual listed company with is found on both the Australian and Toronto Stock Exchanges. It will accord Rio Tinto a foothold into Zambia with its large Lumwana mine. It will also give them a significant land position to undertake further exploration as per the client note written by Mr Fagan.
Zambia is also seen as a lower risk region compared to Mozambique which is where Riversdale Mining is located. This means that Equinox is an easier acquisition from a geopolitical risk point of view for Rio Tinto as well.