Robert Wilson, chairman of London-based Rio Tinto (RTP-N), has declared that he sees an expanding future for his company in Canada, possibly including further acquisitions.
Wilson was speaking at a mining conference in Toronto. “I’m not precluding the possibility of acquisitions,” he said. “Our focus at this stage is concentrated more on the existing activities we’ve got in Canada, all of which are expanding.”
Rio already has a strong foothold in Canada. It controls the $1.3-billion Diavik diamond project, 300 km northeast of Yellowknife and 35 km southeast of the producing Ekati diamond mine. Wilson says this project is Rio’s main focus in Canada.
Rio also has a 20.3% stake in the Labrador Iron Ore Royalty Income Fund, which owns an 18.9% interest in Rio’s 56%-owned subsidiary, Iron Ore Co. of Canada, operator of the large iron mines at Labrador City. In April, Rio walked away from a takeover offer for the fund after too few unit-holders tendered their shares.
Many analysts see Toronto-based nickel giant Inco (N-T) as a likely target for future takeover bids by Rio.
“It’s not obvious to me where the value-creating opportunity would be for us to acquire Inco,” said Wilson. However, when he was pressed, he didn’t rule out the possibility.
At a mining conference in Montreal, Scott Hand, Inco’s CEO, said Inco might look for a partner at its large, long-stalled Voisey’s Bay nickel project in Labrador.
He said Inco’s Goro nickel project in the French Pacific territory of New Caledonia is on schedule. Construction is set to begin later this year. He said this project could also involve partners.
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