On December 6, Australian Stock Exchange-listed mining company Riversdale Mining Limited (RML) which has mining interests in Africa announced that it has received a takeover offer from giant Australian miner Rio Tinto. The two companies have already commenced negotiations with a view to a possible deal. It is reported that Rio Tinto's preliminary offer for each share of RML is AU$15. The total acquisition price quoted by Rio Tinto is AU$3.5 billion (approximately $3.48 billion).
In June this year, RML signed a non-binding memorandum of understanding with Chinese steelmaker Wuhan Iron and Steel Co., Ltd (WISCO) for the joint development of RML's Zambeze project in Mozambique, where a coal resource of nine billion tons has been identified. WISCO has intended to buy 40 percent of the Zambeze project. Based on the MOU, the Chinese steelmaker will buy at least 10 percent of coal produced from RML's Benga coal project which is located close to the Zambeze project. According to the MoU, WISCO also intended to buy eight percent of RML for a consideration of AU$10 per share.
WISCO has said that it still intends to conclude the coal deal with RML, adding that it is too early to say whether its planned deal will be affected by a possible takeover bid by Rio Tinto.