4 May 2009
Maputo — The Australian company Riversale Mining has announced that the Mozambican government has issued it with the mining concession which grants the company mineral rights over coal in the Benga area of Moatize district, in the western province of Tete.
Up to now Riversdale has operated with an exploration licence, and its drilling and other geological operations in Benga allowed it to estimate coal reserves of four billion tonnes.
According to a Riversdale press release, at the same time as granting the concession, the government also approved the mining contract for the Benga Coal Project.
The contract, according to the release, "covers all aspects of the proposed development including exploration, feasibility, operations, fiscal regime, rehabilitation and final mine closure requirements".
The terms of the contract will now be incorporated into the Benga feasibility study which is nearing completion and "will take into account the significant downward shift in underlying cost structures following the impact of the global downturn on the mining industry".
The concession and the contract move the Benga project nearer to production. When the mine is in full operation it will be mining 20 million tonnes of coal a year, with an estimated investment of over 800 million US dollars. Mining is expected to start in 2010.
Riversdale plans to export the hard coking coal, and use the thermal coal in a power station to be built in the Benga area.
The Riversdale Executive Chairman, Michael O'Keefe said that the contract was "the outcome of years of hard work by our management and staff on the ground in Mozambique. We have invested significantly in this project, and we are delighted to have received endorsement through this approval".
Approval of the contract, he added, "underlines our belief in the Moatize basin as a mining region of immense potential and will allow us to deliver on the commitment we have given the government in Mozambique".
Despite the international recession, Riversdale intended to push ahead. "Riversdale Mining is fortunate enough to have cash in the bank and a project primed for development", said O'Keefe. "This is a great time to be scaling up a project in terms of the availability of and access to competitively priced services and equipment".
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