Rio Tinto acquired a majority interest in Riversdale Mining during April, acquiring significant tier one coking coal projects. Through its subsidiary, Rio Tinto Jersey Holdings, Rio Tinto initiated a takeover bid for Riversdale in late December 2010. During early April, its shareholding in Riversdale surpassed 50% and may have increased further with the takeover offer remaining open until April 20, 2011.
Rio Tinto Energy Chief Executive Doug Ritchie, Rio Tinto Energy Chief Development Officer-Coal Matt Coulter and Rio Tinto Australia Managing Director David Peever, have been appointed to the Riversdale board. Additional board appointments are expected to follow, recognizing Rio Tinto’s new majority shareholding.
“Our experience in delivering on major projects and infrastructure provides a strong platform for us in developing Riversdale’s asset base,” Ritchie said. “The growth prospects for the Riversdale assets are considerable. We remain optimistic about the outlook for the global coking coal market. This is a great opportunity for our business to deliver on the development of a large-scale coking coal resource.”
Ritchie recognized Riversdale for nurturing the business to a position where it is poised for growth, acknowledging that developing greenfield projects from scratch is a true success story that reflects well upon the directors and management of the business.
Riversdale’s coal resources in Mozambique amount to a combined 13 billion metric tons (mt) of coking coal in the Tete-Moatize area between the Benga and Zambeze projects. The Benga project is a joint venture between Riversdale (65%) and Tata Steel (35%) and is located in the Tete Province. Coal reserves of 502 million mt and coal resources of 4 billion mt have been identified. Stage 1 construction, which consists of an open-pit mine and a processing plant capable of processing more than 5 million mt/y, has commenced and is expected to be completed during the second half of 2011.
At the Zambeze project, adjacent to the Benga coal project, a coal resource of 9 billion mt has been identified. The Zambeze project is similar in structure to Benga with 22 coal seams outcropping over a strike length of 14 km across the northern portion of the property.
In June 2010, Riversdale signed a non-binding Memorandum of Understanding with Wuhan Iron and Steel and a logistics partnership agreement with the China Communications Construction Co. to develop the Zambeze project.