The market is expecting another player to trump Rio’s $16 per share offer for the Mozambique coking coal miner, with its share price rising another 15c to $16.46 this morning.

International Coal Ventures (ICVL), which has appointed Citi to advise it on any transaction, will have a board meeting on Thursday to clarify whether it is worth putting in a counter-bid for Riversdale, of which Indian Tata Steel holds a 23.6% share along with a direct 25% stake in the Benga project.

Tata-appointed director NK Misra, who is also Tata Steel’s group head of mergers and acquisitions, recommends the offer but “his recommendation is given in his capacity as a director of Riversdale and does not reflect Tata Steel’s position which … is the largest shareholder of Riversdale”

Tata Steel and its subsidiary TS Global Minerals Holdings reserve all their rights in relation to their Riversdale shareholding and any response to the offer.

ICVL, which is a joint venture between Indian state coal body Coal India, Steel Authority of India, iron ore miner NMDC, power company NTPC and steel company RINL, had earlier indicated that it would consider a counter-bid for Riversdale to secure strategic supplies of coking coal from the emerging minerals province of Mozambique, which is expected to become the world’s biggest supplier of coking coal after Australia by 2025.

According to Bloomberg reports, Coal India chairman Partha Bhattacharya said the five Indian companies would have no problem finding the finance to make a higher bid for Riversdale.

“The directors consider that the offer by crystallising value now in shareholders’ investment in Riversdale provides an attractive alternative to holding their Riversdale shares until the major assets of Riversdale – the Benga project and the Zambeze project, both of which are located in Mozambique – come into full production,” Riversdale executive chairman Michael O’Keefe said.

“Taking these projects from their present pre-production status into full production will take a number of years; it will involve very material capital expenditure and it will be subject to significant risks and uncertainties.”

As of today no superior proposal has been received by Riversdale and the company is not aware of any party having an intention to make such a proposal.

O’Keefe, managing director Steve Mallyon and chief financial officer Niall Lenahan have already signed off on pre-bid documents.

Rio’s $16 per share valuation of Riversdale may be called into question with some analysts predicting the price of coking coal could soar to $US500 per tonne after a shortage caused by the Queensland floods, which have affected 85% of the state’s coal mines.

Rio’s offer, which has received pre-bid acceptances accounting for 14.9% of the Riversdale register, is contingent on receiving 50.1% in shareholder acceptances and becomes unconditional when acceptances reach 90%.

The Benga coal mine was officially opened in April and is on track to start first exports of premium hard coking coal in the second half of this year at the rate of 5.3 million tonnes per annum as part of its stage one development.

Riversdale’s plan is to complete the stage two and three ramp-ups to reach 20Mtpa ROM coal by 2013, while its $2 billion Zambeze coal project is located next door.

In its December quarterly released today, Riversdale said the Benga Joint Venture had secured control of the Benga power project via an agreement with Elgas, and that two preferred parties had been shortlisted for an engineering, procurement and construction contract, with key terms of their proposals being reviewed.

Three strategic equity partners have entered discussions with the company on securing a significant stake in the Benga power project and negotiations with potential offtake parties have further advanced.

At Riversdale’s wholly owned Zambeze coal project, mine development drilling and completion of the draft prefeasibility study continue to progress. Discussions with Wuhan Iron and Steel Corporation have been suspended while the Rio Tinto offer is open.

Further refinement of the exploration plan for remote area tenements remains ongoing and six tenements are scheduled for relinquishment following a review of the coal resource development potential.

At its Zululand anthracite colliery, run-of-mine production for the December quarter was 211,538 tonnes, an increase of 45,413t on the September quarter. Saleable production totalled 185,912t, an increase of 53,317t on the September quarter, while product sales were 166,148t.