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Riversdale Mining officially opens its Benga Coal project

World Coal,

Riversdale Mining Ltd has officially opened the Benga coal project, after a ground breaking ceremony attended by the President of the Republic of Mozambique, Armando Emilio Guebuza.

The project, which is a joint venture between Riversdale (65%) and Tata Steel (35%), is Riversdale’s first venture in Mozambique and is estimated to have the resources to produce 20 million tpa for more than 25 years, including premium hard coking coal and thermal coal.

Riversdale Mining executive chairman, Michael O’Keeffe hailed the project as “one of the most significant foreign direct investment projects in Mozambique”, adding: “Today’s ceremony signals the beginning of a programme of works and investment that will eventually see over US$ 1 billion expended on developing a major coal mine at Benga.”

Mining contract
Riversdale has also announced that its subsidiary, Riversdale Mozambique Limitada, has contracted MCC Contracts Pty Ltd (MCC), to cover open pit mining and associated services for the first stage development of the Benga project.

The contract with MCC, a subsidiary of EQSTRA Holdings Ltd, entails initial production of 5.3 million ROM tpa, producing approximately 1.7 million tpa of hard coking coal and 0.3 million tpa of export thermal coal. The first stage development of the project involved the commitment of US$ 270 million.

Speaking of the deal, O’Keeffe said: “We are pleased to have finalised this agreement and look forward to working with MCC, one of the region’s leading mining contractors. Together we are committed to bringing the Benga Coal Mine into production and shipping first coal by late 2011.”

Helping the community
It is expected that the Benga project will have significant long-term benefits on the local and regional economies, stimulate economic growth and create job opportunities in Tete over the next five years. It is reported that 15% of the project’s capital expenditure will be spent in the local market, thus assisting local businesses and industry in the Moatize region.

Riversdale holds a dominant landholding position in the country’s emerging coal regions, covering over 250,000 ha., with the Benga license representing just 8% of the company’s total holdings. It is also planning a coal-fired power plant at Benga, which is expected to be completed in early 2014.

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