Since I've been cranking out articles for The Motley Fool -- beyond three years now -- Rio Tinto
Whether it has been making an acquisition, defending against being acquired, jousting with its customers at pricing time, creating joint ventures, or watching a foursome of its employees become defendants in a foreign court, life has hardly been dull for those monitoring the company. And yet, despite the perpetual action surrounding it, I continue to believe that Rio, along with BHP Billiton
I count four important events percolating now at Rio Tinto:
- Four of the company's employees responsible for iron-ore sales to Chinese steel manufacturers have just completed a three-day bribery trial in which they surprisingly pleaded guilty to taking kickbacks totaling $11.25 million. They await sentencing.
- BHP Billiton and Rio Tinto have agreed to form an iron-ore joint venture combining their Western Australia iron-ore operations. The deal would yield a $5.8 million equalization payment from BHP Billiton to Rio Tinto. But given the recent increase in ore prices, there are those who believe that Rio Tinto may be quietly getting cold feet.
- Rio and Aluminum Corp. of China
(NYSE: ACH)-- or Chinalco -- have agreed to participate in the Simandou iron-ore joint venture in Guinea.
- The two companies also now appear to be discussing the formation of a joint copper and gold development venture in Mongolia.
There is a connection between the first two bullet points: In 2007, Rio Tinto borrowed $38.7 billion to fund the purchase of Alcan, which at the time was trying to fend off advances from Alcoa
But now, following the guilty pleas and potentially two deals between Rio Tinto and Chinalco nevertheless still in the works, it appears that the parties are determined to work together in harmony. From my perspective, that change of atmosphere renders Rio Tinto even more attractive than it used to be.
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