The bank expects infrastructure difficulties to also possibly affect rival coal plays in the country, including Vale’s $US1.3 billion Moatize project in the province of Tete, and Central African Mining and Exploration Company’s Lower Karoo project.

“Despite plans to expand the capacity of the Sena railway and port of Beira, a shortfall is emerging given expected output from Riversdale, Vale and CAMEC,” Macquarie said.

“Given the shortfall, Riversdale Mining is exploring alternate transportation routes to the export market, such as barging down the Zambezi River and on to a trans-shipping facility.”

Macquarie also forecasted that Riversdale would need further funding of around $A350 million, in tranches of $200 million for the second half of the new financial year and $150 million in the first half of the 2011-12 financial year.

Riversdale hopes to begin producing coal at Benga by 2010 and aims to ramp up to full production of 20 million tonnes per annum, including 6Mtpa of hard coking coal and 6Mtpa of thermal coal of saleable product.

The company plans to export coking coal and utilise the thermal coal at a mine-mouth power station.

While the project is 35%-owned by Tata Steel, Macquarie said the steelmaker had a 14.99% interest in Riversdale and could further its stake in the Australia-listed company.

Macquarie said Riversdale had a relatively open register and noted that Mozambique was strategically located close to India.

In Riversdale’s favour, Macquarie noted the company offered exposure to an increasingly bullish coking coal outlook and provided potential exploration upside.

Macquarie has initiated coverage of Riversdale with the underperform rating and has set a 12-month price target of $4.82 per share.

Shares in Riversdale are down 12c this morning to $5.18.