By Alistair MacDonald, Alexis Flynn and John W. Miller
Spurned by Rio Tinto PLC, Glencore PLC CEO Ivan Glasenberg
continued to look at other potential iron ore targets with a call
to U.S. miner Cliffs Natural Resources Inc., according to people
familiar with the matter.
Glencore talked to Cliffs about its Australian iron ore assets
around a month ago, these people said. While that conversation was
described as very preliminary, the call underscores that Mr.
Glasenberg isn't placing all his iron ore ambitions on another
attempt at Rio Tinto.
Earlier this week, Rio Tinto said Glencore had approached it in
July about a possible takeover, which would have created the
world's biggest mining company by value.
Glencore isn't a major producer of iron ore but has a large
marketing arm that trades the product for other miners. Buying up
active miners, or combining with Rio Tinto, would allow it to trade
the commodity, and potentially to bolster prices by closing mines
or delaying expansion.
The Swiss-based commodities giant, whose portfolio ranges from
cotton to zinc and grains, is prohibited under U.K. takeover rules
from making a new approach on Rio Tinto for at least six months.
But as Mr. Glasenberg weighs whether to make a second attempt on
London-listed Rio, he still retains an open mind on other iron-ore
assets, according to two London-based bankers.
In August, Cleveland-based Cliffs hired banks to sell some U.S.
coal assets along with its Australian iron ore mines as it looks to
focus on five core U.S. iron ore mines.
Two people familiar with the matter said that there have been no
firm offers on Cliffs' Australian mines, which are based in the
west of the country, though several companies and Chinese
steelmakers have expressed preliminary interest. The state of the
iron ore market could lead the company to shelve its current
efforts to sell these mines, one of these people said.
A 40% fall in the price of iron ore has made such sales more
difficult as buyers wait for the market to calm and sellers become
reluctant to sell at lower prices. Iron ore, a key ingredient in
steelmaking, has fallen amid worries about a supply glut that could
take years to clear.
Mr. Glasenberg, an active deal maker who often casts his net
wide when looking at potential targets, has shopped for iron ore
assets before. Last year, Glencore circled Rio Tinto's Canadian
iron ore operations before backing away, people familiar with the
matter said at the time. Rio Tinto didn't end up selling its 59%
stake in the Canadian mine. Before this summer, Glencore also
looked at Guinea's Simandou iron-ore mine.
Write to Alistair MacDonald at alistair.macdonald@wsj.com,
Alexis Flynn at alexis.flynn@wsj.com and John W. Miller at
john.miller@wsj.com
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