Private equity firm Apollo Global Management LLC (APO) has made a takeover bid for mining giant Rio Tinto plc's (RTNTF,RIO,RIO.L, RTPPF) Canadian iron-ore operations, Bloomberg reported Monday, citing a person familiar with the situation.
Rio Tinto is said to have hired Credit Suisse and Canadian Imperial Bank of Commerce to sell all or part of its 59 percent stake in the Canadian iron-ore operations. A sale of the unit may raise $2 billion to $3.5 billion.
According to the Bloomberg report, Apollo is through to the second round of bidding for Iron Ore Co. of Canada or IOC. In the recent first quarter, IOC's saleable production grew 20 percent following the completion of the Concentrate Expansion Project.
Rio Tinto recently announced the potential sale of its Pacific Aluminum unit and is reportedly pursuing an initial public offering of its diamond unit after it failed to find a buyer for the division.
Last Wednesday, Canada-based Lundin Mining Corp. (LUN.TO) said it will buy the Eagle nickel and copper mine in the U.S. from Rio Tinto for about $325 million.
Apollo Global Management is among the private equity firms that have increased their efforts to invest in mining as large mining companies sell assets amid declining commodity prices.
In mid-January, Apollo Global Management and NRI Management Group LLC announced a strategic partnership to invest In mining assets.
RIO closed Monday's trading at $43.91, up $0.60 or 1.39 percent on a volume of 3.24 million shares. APO closed Monday's trading at $24.00, up $0.30 or 1.27 percent on a volume of 615,093 shares.
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