Wuhan Iron & Steel Corp, the Chinese government controlled steel giant has signed a Memorandum of Understanding (MoU) with Australian company Riversdale Mining Ltd. As per terms of the agreement it will take a 40% stake in a Mozambique mine and a minority share in the Australian miner for US$800 million.
Wuhan Iron and Steel Corporation (WISCO) will make the payments in three tranches. At the date of signing the definitive agreements WISCO will also be issued 8% of the ordinary shares in Riversdale Mining Ltd. at a pre agreed price of $10 each.
Riversdale Mining Ltd also signed a logistics partnership agreement with the China Communications Construction Company (CCCC) for the development of the Zambeze Coal Project in Mozambique. The transcation values Zambeze at USD $2 billion.
Presently the MoU is non-binding, pending completion of definitive agreements within 120 days of signing the MoU. The deal was announced in Sydney and underlined the Sino-Australian ties despite the ousting of Prime Minister Kevin Rudd on Thursday.