China's Wisco to buy 40 per cent in Riversdale's Mozambique coal project for $800 million
24 June 2010
China's third-largest steel producer Wuhan Iron and Steel Corporation (Wisco) has proposed to invest $800 million and take a 40 per cent stake in Australia's Riversdale Mining' Zambeze coal project in Mozambique.
Sydney-based and Africa focused Riversdale is a junior coal exploration and mining company that holds interests in various properties, including Zululand Anthracite Colliery mine located in the Zululand coalfield of northern Kwa-Zulu Natal, and Mozambique tenement areas comprising 22 licencses in Mozambique.
Wisco has signed a non-binding memorandum of understanding (MoU) with Riversdale to invest $800 million in its Zambeze coal project in Mozambique, valuing the project at $2 billion.
Wisco will pay Riversdale the $800 million in three trenches. The Chinese state-owned steel maker will pay $200 million after signing a definitive agreement, which must take place within 120 days of signing the MoU.
Wisco will pay the remaining money after completion of the Zambeze Coal Project feasibility study.
Riversdale said the MoU also covers logistics and infrastructure expertise from China Communications Construction for transporting the coal to ports for export, which can be done by using the barges on the Zambezi river.