Rio Tinto (NYSE:NNN), Massey (NYSE:MEE) in on M&A Trend

Rio Tinto (NYSE:NNN) and Massey (NYSE:MEE) are in the middle of what appears to be a consolidation trend in the coal industry, as Rio reportedly has upped its bid for Riversdale (ASX:RIV), and Massey seems to have drawn the interest of several companies wanting to acquire them.

FBR said, "M&A is continuing to be focus for the coal group in recent weeks, with reports continuing to highlight multiple transactions potentially in works. This morning media reports indicate Rio Tinto's plans to increase its bid for Riversdale by about 7%. Back home in US, MEE is considered to be weighing offers from multiple bidders but hasn't formalized the process of auctioning the company yet."

"Positive trends also continue to emerge for producers with Chinese coal imports (both steam and met) continuing to rise month-over-month and the Australian government policy group coming out in support of the miners on the issue of including credits for future state royalties. This is positive for Australian resource stocks, particularly iron ore and met coal levered."

Rio Tinto (NotRated) planning to increase Riversdale Mining (NR) offer. The Australian is reporting that Rio Tinto is planning to put a formal offer for Riversdale Mining at $16/sh, up from $15/sh previously cited. The new bid will value the company at A$3.8B vs A$3.5B earlier. We earlier noted that Tata Steel owns 26% and Brazil's steel maker Cia Siderurgica Nacional SA, owns 13% in Riversdale. Riversdale is developing two coking coal projects (Benga and Zambeze) in Africa and is expected to produce about 1 M Tons in 2011. We met the company during our last month's visit to Australia and were impressed with the management and the growth profile of the company."

Massey was trading at $52.42, up $0.61, or 1.18 percent at 11:42 AM EST. Riversdale Mining was trading at $16.30. Rio Tinto was trading at $70.56, up $1.48, or 2.14 percent.