the rio war chest?

  1. 5,867 Posts.
    RIO is all set to go through $40 per share, record earninggs this year and a prospective PE of 12, and will have around $10billion in the kitty burning a hole in its pockets.
    WMR? Current market cap just over $8billion mmm.
    RIO has no major issues with the Feds on uranium given its existing ERA position, and the WA government should have no problems.
    It knows Mt Keith having sold half the mine to them in the 90's.
    Phophate could be easily handled by the RIO industrial minerals marketing team.
    Olympic Dam-not an easy one. The orebody is tricky and RIO's don't like owning smelters as a preference (but have experience through Bingham in the US, though not necessarily a pleasant one). A similar argument on Kambalda but the difference between nickel smelting and copper smelting is not significant.
    Mozambique? Gone very quiet of late, but RIOs are a significant force in the mineral sands game already and would know what to do with it.
    WMR head office-shlicked, sorry.

    Is it worth it to RIO, probably yes, just to stop Xstrata getting to big for its britches and threatening RIOs current exalted position as no2 behind BHP.

    Conversely, RIO could do a nice buy back/capital return/special dividend-all of which is attractive to me being a holder.
    Next few weeks will be interesting.
    Cheers,TAS
 
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