Besides the 4560-hectare Benga license, Riversdale holds around 285,000 hectares in Mozambique, and the new resource covers only 2% of its landholdings.

The company said today that some 720 million tonnes of the 1.2Bt could be mined via an opencut development.

Based on initial washability analysis results, coal products from the project could include an export hard coking coal at 10% ash and a secondary thermal coal product, consisting of an export thermal coal with 20% ash, or a domestic thermal coal at approximately 35% ash.

Riversdale chairman Michael O'Keeffe said the resource confirms the "huge potential" of Mozambique's Moatize area.

"Riversdale has a dominant land holding position in a region that we believe is going to play a major part in supplying high growth regional and international economies," he said.

"Infrastructure planning discussions have commenced and we have attracted the participation of a company the quality of Tata Steel to help us develop the mine and fast-track the infrastructure and marketing."

O'Keeffe said the next step for the Sydney-based company would be to elevate the coal resource to JORC-compliant measured and indicated categories before moving to a bankable feasibility study by mid-2008.

In August the company signed a memorandum of understanding with Tata Steel which will see Tata acquire a 35% interest in two of Riversdale's tenements and offtake rights to 40% of coking coal produced.

In the last quarter, Riversdale's operational Zululand Anthracite Colliery in South Africa stepped up production by 10% to reach 173,804t.