Undertaken by Wave Engineering Solutions, the BFS confirmed the viability of the $US205 million, 1.5Mt per annum mine for a life of 25 years.

The study also covered an associated 450-megawatt power station to supply the domestic market in the country.

There is more scope to expand the mine, however, as Atomic set an additional exploration target of 160-320Mt for the “underexplored northern sub-basins” of the Ngaka coalfield.

More than 50 surface boreholes are planned for the rest of 2010 with drilling expected to continue well into next year.

The BFS indicated there was high potential to gain more proven reserves out of the measured resources in both open and underground mining areas.

Outside of the pit design, an underground mining inventory of 40Mt is expected.

The Mbalawala block already stretches for 154.8 square kilometres in the coal field in southwest Tanzania.

Atomic also holds additional concessions over the Liweta, Mbamba Bay and Mhukuru coalfields which are largely untested and expected to offer more upside.

Of the 139Mt of the measured resources at Mbalawala, the calorific value was calculated to average 6326 kilocalories per kilogram with ash content of 18.9% and inherent moisture of just 2.9%.

Total sulfur was estimated to be 1.4%.

The reserve estimate was prepared by Coffey Mining Australia while the BFS will be released later this month.

Start-up dates have not yet been released, but an Atomic spokesman said bulk sample mining was already taking place.

Atomic aims to replace Tanzania’s need to import coal for power generation for the first 18 months to two years of mining, while the power plant project is expected to take 2-3 years.

After satisfying the domestic market, Atomic will explore various options to either rail or barge the coal within Africa ultimately to reach export markets, with the construction of new rail also under consideration.

The Ngaka coal project is being developed through Tancoal Energy, a joint venture between Atomic’s 85%-owned Tanzanian subsidiary, Pacific Corporation East Africa, which owns a 70% interest in Tancoal, and the National Development Corporation of Tanzania, which owns 30%.

Atomic shares closed down 3c to 22c yesterday.