NEW DELHI—India's Tata Steel Ltd. said it will sell its 26.27% stake in Riversdale Mining Ltd. to Rio Tinto for 1.06 billion Australian dollars (US$1.12 billion), giving Rio Tinto complete control of the Africa-focused coal-mining company.
![[riversdale0616]](http://si.wsj.net/public/resources/images/OB-OI773_rivers_D_20110616091221.jpg)
Riversdale Mining
A drilling operation of the Mozambique Project of Riversdale Mining.
Rio Tinto plans to delist the shares of Australia-based Riversdale. Following the Tata Steel sale, the Anglo-Australian mining company will hold more than 99% in Riversdale, leaving the free float of shares at just 0.3%. Tata said it didn't want to remain an investor without a joint-venture agreement with the majority owner.
After Brazil's Cia. Siderurgica Nacional in April sold its 19.9% stake in Riversdale, Tata was the only remaining major stakeholder beyond Rio Tinto.
Tata said it would continue to hold its 35% stake in a Riversdale unit that owns the Benga mines in Mozambique, where the companies have a long-term for the output of coking coal, which is used in making steel. "Tata Steel would look forward to working with Rio Tinto and discussing in good faith ways to enhance its participation in the Benga joint venture," the Indian company said Thursday.
Indian steelmakers are hurrying to acquire overseas coking-coal mines as the country lacks good-quality deposits and depends almost entirely on imports. India annually imports 30 million tons of coking coal, making it the third-largest importer in the world, after Japan and China.
Overseas mines are also a good hedge against sharp rises in coking-coal prices as demand from Chinese and Indian steel mills have led to prices doubling over the last year.
The Indian steelmaker's decision to sell its stake in Riversdale came a day before Rio Tinto's takeover offer for the Africa-focused coal miner expires.
Write to Prasenjit Bhattacharya at prasenjit.bhattacharya@dowjones.com
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