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Shares of BHP Billiton have risen nearly 18%, while James River Coal Co. (JRCC | Quote | Chart | News | PowerRating) stock has climbed about 8%.
By 10:50 am Eastern Time, BHP Billiton shares were up $5.54 at $38.96 per share, while James River Coal shares were up 33 cents at $8.08.
Other stocks that are notably higher include CONSOL Energy Inc. (CNX | Quote | Chart | News | PowerRating), International Coal Group (ICO | Quote | Chart | News | PowerRating), Alpha Natural Resources Inc. (ANR | Quote | Chart | News | PowerRating), Dynamic Materials Corp. (BOOM | Quote | Chart | News | PowerRating) and Stillwater Mining Co. (SWC | Quote | Chart | News | PowerRating), which reached a tentative deal on a restructuring plan with the USW Union at the East Boulder Mine.
Before the opening bell on Tuesday, BHP Billiton announced that it scrapped its hostile takeover offer for Rio Tinto. The company said its Board of Directors no longer believes that completion of the offers for Rio Tinto would be in the best interests of BHP Billiton shareholders.
Meanwhile, Rio Tinto, in response to BHP Billiton's announcement, said that it has significant stand alone growth opportunities and will continue with its strategy of operating and developing large scale, long life and low cost assets to generate value for shareholders.
In November 2007, BHP Billiton announced its interest to purchase Rio Tinto in an all-share deal. The initial offer was 3.34 shares of BHP Billiton stock for each share of Rio Tinto, but Rio Tinto's Board of Directors rejected it. Later, in February 2008, BHP Billiton made a formal bid of 3.4 BHP Billiton shares for each Rio Tinto share. When the bid was made, it was worth about $147 billion and considered as the largest ever deal in the mining sector. However, the deal value has now fallen to about $68 billion due a slide in both companies' share prices.
According to BHP Billiton Chairman Don Argus, the decision was first and foremost about BHP Billiton shareholder value and risks to that shareholder value.
"While we have not changed our view of the basic industrial logic of the combination, or of the longer term prospects for natural resource demand growth driven by emerging economies, we have concerns about the continued deterioration of near term global economic conditions, the lack of any certainty as to the time it will take for conditions to improve and the risks that these issues imply for shareholder value," Argus said.
BHP Billiton's Chief Executive Officer Marius Kloppers said that recent global events and associated falls in commodity prices have altered risk dimensions. As the company is very focused on its balance sheet strength, the greater debt exposure of the combination and the difficulty in divesting assets have increased risks to shareholder value to an unacceptable level, he noted.
After the closing bell on Monday, Stillwater Mining said that it has reached a tentative agreement with United Steel Workers and its Local 11-0001, East Boulder Unit regarding changes to the current Collective Bargaining Agreement that are impacted by the company's restructuring plan.
The union members will vote on the tentative agreement on November 26 at their regularly scheduled Union meeting.
If the deal is ratified, about 204 hourly employees will be come back to work at the East Boulder Mine. In addition, about 41 miners will be offered employment at the Stillwater Mine.
SWC and USW Local 11-0001 have agreed that all statements to the media concerning the restructuring negotiations will be done jointly unless twenty-four hour notice has been given from one party to the other.
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