Rio Requests Expressions of Interest for Mozambique Mine Power Project

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Written by Richard Finlayson, Senior International Editor for Industrial Info Resources (Sugar Land, Texas)--As the Benga coal mine in the Tete province of Mozambique moves toward first-phase production of 5 million tons and aims optimum levels of 20 million tons of coal per year (including 6 million tons of hard coking coal and 4 million tons of export thermal coal), Rio Tinto (NYSE:RIO) has issued a request for expressions of interest for developers and operators of a power plant at the mine.

The power plant would be sited on the mining concession and have a capacity of between 400 megawatts (MW) and 600 MW. Environmental permitting has been secured for a potential 2,000 MW plant.

Rio Tinto is looking to prequalify parties interested in participating as equity partners and in taking responsibility for the development and operation of the power plant.

It is proposed that the power plant output will be supplied to Rio's coal mining operations in the territory and to regional offtakers, including Electricidade de Mocambique (EDM).

Estimates for investment required for the power project development are about $1 billion. The project could be included in the Mozambique regional Transmission Backbone project, which covers the building of a new transmission infrastructure in the country.

The Benga mine has driven the development of other infrastructure, including the rehabilitation of the 600-kilometer Sena rail line, the upgrade of the Port of Beira, and the construction of a 20-million-ton-per-year coal terminal.

For related information see May 2, 2012, article - New Bidding Round for Coal Riches in Mozambique's Tete Province and February 24, 2012, article - Mozambique Builds Power Infrastructure for Resource-Led Development.

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