Sydney, Australia, 25 June – Australian company Riversdale Mining has announced the signing of a memorandum of understanding with the Wuhan Iron and Steel Corp (Wisco) and a logistic partnership agreement with the China Communications Construction Company (CCCC) for development of a coal project in the Zambeze area of Mozambique.
Under the terms of the memorandum of understanding, Wisco acquires 40 percent of the Zambeze coal project for US$800 million to be paid in three installments and when the definitive documents are signed it will receive 8 percent of ordinary shares of Riversdale Mining at the agreed price of 10 Australian dollars per share.
The Zambeze coal project is the second project in which Riversdale has been involved in the Moatize coal basin and is adjacent to the Benga coal project, which is being developed in partnership with India’s Tata Steel group.
Riversdale Mining noted that on 31 May it had revised the estimated reserves at the Zambeze project to 9 billion tons.
The memorandum of understanding also stipulates that, under the terms of the deal, Wisco has acquired the right to buy 40 percent of the coke coal mined at the Zambeze project and 10 percent of the coal produced at the Benga project, at market prices.
In its turn CCCC will carry out a broad-ranging survey of the mine-ship logistics with a view to a large amount of coal from the Zambeze project being sent to Mozambique’s ports for export.
Wisco is a large producer of iron and steel located in Wuhan, in China’s Hubei province, with annual production of 40 million tons.
The CCCC group and its subsidiary companies are involved in the design and construction of transport, dredging and heavy machinery manufacturing facilities, amongst other activities. (macauhub)