Agencia de Informacao de Mocambique (Maputo)
17 July 2009
Maputo — The Australian company Riversdale has announced that the viability study of the project to mine coal at Benga, in the western Mozambican province of Tete, has now been concluded.
A Riversdale press release received by AIM states that the study will now be sent to the Indian firm Tata Steel, which has a 35 per cent stake in the project, for its analysis. After this, the Riversdale-Tata consortium is likely to give the go-ahead for the start of mining operations.
The viability study was based on the estimates of coal reserves made by Riversdale in April. Total coal resources at Benga are now put at four billion tonnes - 319.9 million tonnes of measured resources, 730 million tonnes of indicated resources, and 2.99 billion tonnes of inferred resources.
The viability study envisaged that, in an initial phase, 5.3 million tonnes ("run of the mine") will be extracted per year. Of this 1.7 million tonnes will be top quality hard coking coal for export, plus 300,000 tonnes of thermal coal also for export.
Expansion to the second stage, by 2014, will raise the run of the mine production to 10.6 million tonnes a year, which will include 3.3 million tonnes of coking coal and two million tonnes of thermal coal for export. The final stage will almost double this production to 20 million tonnes run of the mine,
The timetable for the third stage, the release notes, "will depend, among other factors, on the future conditions of the coal market, and the availability of port capacity and of rail and river transport".
Mining and coal processing should begin by early 2011. Exporting the coal from the port of Beira will depend on the reconstruction of the Sena railway line, which was comprehensively sabotaged by the apartheid-backed Renamo rebels in the early 1980s. Most of the line has now been rebuilt and it should be operational by the end of this year.
Exports will also depend on the coal facilities at Beira. Rehabilitation of the existing coal terminal should be complete by the second quarter of 2011, but an entirely new coal terminal should be built by 2014.
Since the Sena line cannot cope with the full demands, not only of Riversdale, but of the various other companies that plan to open coal mines in Tete, barges will also be used to move the coal down the river Zambezi. The distance from Benga to Chinde, at the mouth of the Zambezi is 553 kilometres
Riversdale says it undertook research earlier this year along the river, and the results were encouraging. It has now begun a complete viability study into the transport of coal by barge to a floating platform that would be moored at Chinde.
As for funding, Riversdale says that it possesses enough funds of its own to finance its 65 per cent (equivalent to 169 million US dollars) of the development of the first phase of the Benga project.
The release made no mention of the project to build a coal fired power station at Benga that would use much of the thermal coal that is not exported.
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