Ashton Mining Still in Play

November 6, 2000

Ashton Mining Still in Play

Rio Tinto PLC, the Anglo-Australian mining group, moved one step ahead of De Beers today in the battle for control of Ashton, the Australian diamond producer. Rio Tinto announced it acquired nearly 50% of Ashton, after Malaysia Mining Corp. agreed to sell Rio Tinto its entire 49.72% holding of Ashton. Rio Tinto also increased its bid for Ashton from $1.85 Australian to A$2.20, slightly below De Beers' latest offer of A$2.28 a share.

This announcement comes after De Beers, which was thought to have won the bidding for Ashton, extended its offer to Nov. 24 because of problems with the Belgian Competition Council and the Foreign Investment Review Board. De Beers says it has agreed with FIRB on four of five conditions, but talks are stalled over one issue. According to the Financial Times, Australian regulators are concerned about De Beers' proposal to market Ashton's diamonds, which are currently sold through Argyle's Antwerp sales office. Rio Tinto already has the regulatory approval it needs to take over Ashton.

In an announcement today, De Beers acknowledges Rio Tinto's latest bid. "De Beers recognizes that receipt by Rio Tinto of valid acceptances for 49.82% means that the De Beers offer is unlikely to be successful," the company says in a press release.

- by Julia M. Duncan