The Mozambique government has approved the plant following completion of an environmental impact study.

The plant will be developed in two stages, a 500MW coal-fired, mine-mouth power station expected to be completed during 2013 using existing transmission assets, and an upgrade to 2000MW capacity depending on the proposed transmission backbone and other transmission capacity.

The plant will be located in Tete Province, close to Riversdale’s Benga coal project.

Riversdale has also been granted access to the existing Mozambique power transmission network.

Riversdale must still conclude power purchase agreements with various offtake parties and is currently in discussions.

The company closed down 0.84% yesterday at $A8.23.