Australia-listed Riversdale Mining has agreed to jointly develop its Zambeze coal project with China’s Wuhan Iron & Steel Corporation (Wisco), in a transaction that values the Mozambique mine at $2-billion.

Wisco will acquire a 40% interest in the Zambeze project for $800-million, and will be issued an 8% shareholding in Riversdale at an agreed price of A$10 a share. The Chinese steel group will have the right to buy 40% of the coking coal produced from the Zambeze project, which has a nine-billion ton resource, and at least 10% of the coking coal produced from the nearby Benga coal mine.

Zambeze is Riversdale’s second coal project in the Moatize basin and is adjacent to the Benga mine, which will start production early next year.

The Australian company also agreed a logistics deal with China Communications Construction Company (CCC). The memorandum of understanding covered the facilitation by Wisco, CCCC and other Chinese companies, of a comprehensive study of mine-to-ship logistics to enable the export of large tons of coal products from the Zambeze project to ports for export markets.

Credit: Mining Weekly