Riversdale (ASX:RIV) Signs MOU with WISCO for Zambeze Coal Project
Sydney, June 24, 2010 AEST (ABN Newswire) - Riversdale Mining (ASX:RIV) has signed a non-binding Memorandum of Understanding (MOU) with China's Wuhan Iron and Steel (Group) Corporation (WISCO) and a logistics partnership agreement with the China Communications Construction Co (HKG:1800) for the development of the Zambeze coal project in Mozambique.
The MOU provides for the acquisition by WISCO of 40 per cent of the Zambeze project for a total consideration of USD800 million to be paid in three tranches and subject to achievement of certain milestones. When completed, the transaction values Zambeze at USD2.0 billion.
In addition, at the date of signing of the definitive agreements, WISCO will be issued 8 per cent of the shares in Riversdale Mining at A$10.00 each.
WISCO will earn the right to purchase at least 40 per cent of the coking coal produced from Zambeze, and the right to purchase at least 10 per cent of the coking coal produced from Benga coal project near Zambeze.
The MOU also covers the facilitation by WISCO, along with China Communications Construction and other Chinese companies, of a comprehensive study of mine-to-ship logistics to enable the export of large tonnages of coal products to ports for export markets.
Asia Business News Asia Bureau
Riversdale Mining Limited
China Communications Construction Company Limited