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During the June quarter, Australia-listed Riversdale was able to secure the contract from the Mozambique government, now allowing it and 35% partner Tata to decide whether to approve the development.
In its quarterly report, Riversdale pointed out the project exceeded its required rate of return with capital costs of $US260 million for Stage 1 and $50 million for Stage 2.
Benga holds an estimated 4 billion tonne resource, comprising 1.03Bt measured and indicated, of which 893 million tonnes are below 500m deep. An initial coal reserve of 273Mt has been identified.
The prospective truck and shovel operation has flagged an initial output of 5.3Mt per annum run-of-mine coal under Stage 1 to produce 1.7Mtpa of hard coking coal and 300,000t of export thermal coal.
Stage 1 is planned to commence early in 2011.
Under Stage 2, expected to begin in 2014, a second module will be added to the preparation plant, which will allow increased ROM production of 10.6Mtpa, including 3.3Mtpa of hard coking coal and 2Mtpa export thermal coal.
The final stage, with the addition of two plant modules, would increase ROM output to 20Mtpa.
Riversdale is currently evaluating rail access and the viability of barging coal down the Zambezi River.
It is also evaluating the viability of the Benga power project, labelling the progress as “encouraging”
Riversdale said it had cash reserves of $A295 million on hand, adequate for its 65% share of the Benga Stage 1 development.
At Riversdale’s working Zululand anthracite colliery, depressed demand during the June quarter affected sales, which fell 16% to 562,796t.
The mine produced almost 200,000t ROM coal for the quarter.
Riversdale said the Deep E shaft had proven geologically challenging with various faults and dykes.
During the quarter, production was able to recommence in the main development after successfully driving through the faults, opening up additional pit room for future developments.
The mine has introduced a Voest ABM10, which has helped gradually lift performance.
A section has also been reopened to establish pit room for the newly developed ultra low seam miner to begin in the September quarter.
