Overnight Tata said it did not want to hold on to its Riversdale stake without a joint venture agreement with the majority shareholder.

Riversdale is set to be delisted and Tata decided to sell its shares under Rio’s existing takeover offer.

Rio is poised to gain more than a 99% stake in Riversdale after more than six months of efforts to fully acquire the company.

Tata’s stake in Riversdale has almost doubled in value in less than four years.

The steelmaker might still have an opportunity to shore up future coking coal supplies, as Tata said it will continue to hold a 35% stake in a Riversdale subsidiary which owns coal assets in Mozambique.

“Tata Steel would look forward to work with Rio Tinto and discuss in good faith ways to enhance its participation in the Benga joint venture based on the framework captured in the joint venture agreement between Tata Steel and Riversdale Mining,” the steelmaker said.

In an investment note to clients, UBS said Rio’s purchase price for Riversdale was around $4 billion to gain a 13 billion tonne resource – with roughly 4Bt from the existing Benga mine and 9Bt at the promising nearby Zambeze open cut project.

UBS estimated that about two-thirds of the established resources were metallurgical coal with the rest as thermal coal.

“While the resource is perhaps not the quality we are used to seeing in Australia, it is a large resource and one which we would expect Rio Tinto to exploit over time,” UBS said.

“We would expect Rio Tinto to look at the big bang option of a rail line to the coast and deepwater port at Nacala, with an operation producing 30Mtpa as a minimum. This is perhaps the 10 year plan.

“We like the transaction as it provides Rio Tinto with a hard coking coal option, something it lacked within its portfolio.”

Out of Rio’s coking coal interests in Queensland, the analysts noted that the Hail Creek mine in Queensland could only be expanded by another 2Mt per annum to 10Mtpa, while its Kestrel longwall mine holds a further 1Mtpa expansion option.

Rio is yet to make an announcement on Tata’s flagged transaction.

The Benga open cut mine was officially opened in April 2010 and is targeting 6 million tonnes per annum of hard coking coal and 4Mtpa of export thermal coal by 2013.

Total first stage capacity is expected to be reached in the last half of 2011, to hit 5.3Mtpa run of mine.

Riversdale has previously indicated that the $2 billion Zambeze hard coking coal project could become a 90Mtpa ROM operation.

Riversdale’s Zululand anthracite colliery in South Africa had 377,633t of ROM production from underground mining in the last half of 2010.

Rio shares are up 20c to $78.60 this morning.