Rio Tinto said on Monday that Swiss commodities giant Glencore has upped its offer for the firm's Australian coal assets, raising the stakes in a bidding war with China-backed Yancoal.
Rio, the world's second-largest miner, said in January it was selling Coal & Allied to Yancoal Australia -- majority-controlled by China's Yanzhou Coal -- for US$2.45 billion.
But Glencore, which like Yancoal also operates numerous coal mines in Australia, offered US$100 million more for the assets in New South Wales state earlier this month.
Rio last week said it still favoured Yancoal since the deal was expected to be completed faster due to greater funding and regulatory certainty, leading Glencore to deliver a fresh US$2.675 billion bid.
"We believe the Glencore offer satisfies the criteria for a 'superior proposal' -- it delivers substantially greater value to Rio Tinto shareholders and low deal completion risk," Glencore said in a statement.
Rio said that if it decides Glencore's new bid was better, Yancoal would have two business days to respond, meaning its annual general meeting in London on Tuesday would be adjourned.
"If the Rio Tinto board decides to reject Glencore’s revised proposal, then the general meeting is expected to proceed as currently scheduled," it added, with shareholders voting on the Yancoal deal.
In a sweetener, Glencore said it would provide full payment to Rio once the deal is completed. Its previous offer, along with Yancoal’s bid, provided deferred payments over five years.
Yancoal has already been given the green light by Australia's Foreign Investment Review Board, while the Glencore plan would be subject to regulatory approval.
Rio, which in February reported a surge in annual net profit thanks to improving commodity prices, is selling Coal & Allied in a divestment drive that analysts expect will lead to a complete exit from the sector.