Is Rio Tinto a takeover target?

Rio Tinto’s iron ore division is the best mining business in the world. Over the past five years, Rio has generated US$47bn in earnings before interest and tax from shovelling and selling dirt. Return on assets over that period has average about 90%. The Pilbara operation is the envy of peers, the bane of steel makers and the backbone of Western Australia’s economy. And it is now a target. Commodity trader and miner, Glencore, offered to merge with Rio to form a US$160bn colossus that would overtake BHP to become the world’s largest miner. Rio has spurred the offer but...

Rio Tinto’s iron ore division is the best mining business in the world. Over the past five years, Rio has generated US$47bn in earnings before interest and tax from shovelling and selling dirt. Return on assets over that period has average about 90%. The Pilbara operation is the envy of peers, the bane of steel makers and the backbone of Western Australia’s economy. And it is now a target.

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