Australia's Riversdale Mines Major Coking Coal Reserve in Mozambique

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Researched by Industrial Info Resources (Sugar Land, Texas)--Riversdale Mining Limited (ASX:RIV) (Sydney, Australia) is planning to build a 500-megawatt (MW) coal-fired power station in Mozambique. The $2 billion power project will obtain its coal feed from a major coal-mining development being planned in the region by Riversdale. India's Tata Steel (BOM:500470) (Bombay) is a 35% partner in the project, which will be funded by foreign banks and international financial institutions.

There are plans to extend the power station's capacity to 2,000 MW as well as the possibility of Australia's Elgas joining the project. Power would be exported to South Africa, Zimbabwe, Malawi, Zambia and possibly Namibia and Botswana.

The company is targeting the end of 2010 to open its first coal mine in the province of Tete in western Mozambique. Riversdale has obtained licenses for mining in Tete covering 290,800 hectares. At the Benga tenement in the Moatize coal basin, there is an inferred reserve of 1.9 billion tons of coking coal. Benga covers an area of only 4,000 hectares, and the rest of the area of the company's license is largely unexplored.

Riversdale has coal tenements along both banks of the Zambezi River that stretch as far as the south bank of the hydropower lake Cahora Bassa. With the likelihood of more coal deposits in the 280,000 hectares that are unexplored, the tenements could hold more coal than the Maotize area licensed to Brazil's Vale (NYSE:RIO) (Rio de Janeiro, Brazil), which has an estimated reserve of 2.4 billion tons of coal. With these prospects in mind, the company describes the Tete resource as the next major coking coal basin. Thermal coal for export could also be available.

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