It would be easy to suppose that the fraud claim against Rio Tinto Group filed by the U.S. Securities and Exchange Commission is ancient history.
The miner’s Australian shares closed down 0.8 percent on Wednesday, only a slightly bigger loss than arch-rival BHP Billiton Ltd., which slipped 0.5 percent in the absence of a court case.
That would be a mistake, though. Rio Tinto’s scramble for Africa at the peak of the last mining boom may not have been anywhere near as destructive as the one sparked in the 19th century by another ambitious miner, Cecil Rhodes. Still, it carries a stark warning to an industry gearing up for a fresh round of spending as copper bursts through $7,000 a metric ton for the first time since 2014.
Looking through the papers filed in a U.S. district court Tuesday, one characteristic stands out: ambition. At the time of the $3.7 billion 2010 takeover of Riversdale Mining Ltd. at the heart of the SEC’s complaint, Rio Tinto Chief Executive Officer Tom Albanese had for many years played third fiddle to BHP and Vale SA in producing the raw materials for China’s steel boom.
Vale was and remains the world’s biggest producer of iron ore, and BHP of the coking coal used in steelmaking. Rio Tinto coveted a bigger role in each market.
For the rest of this article: https://www.bloomberg.com/gadfly/articles/2017-10-18/rio-tinto-s-scramble-for-africa