Riversdale ups Benga coal mine estimateApril 24, 2009 - 6:44AM Australian mining firm Riversdale and Indian partner Tata Steel have increased their estimate of coal resources at their Benga mine in Mozambique by 90 per cent.
"Based on the data from recent drilling activities, a coal resource of four billion tonnes has been estimated," Riversdale executive chairman WM O'Keeffe says in a statement.
"This coal resource represents an increase of 90 per cent over the previous resource announced in September 2008."
Riversdale now estimates initial reserves at 273.3 million tonnes - 181.3 million tonnes of proven reserves and 92 million tonnes of probable reserves.
"The increased resource and initial reserve estimates represent a material development for the project and will impact positively on the overall scope of the mine and its potential to develop into a project of global significance," O'Keeffe said on Thursday.
The companies are now awaiting a mining contract from the Mozambican government. O'Keeffe said they expect final approval later this quarter.
Riversdale holds a 65 per cent stake in the Benga mine and Tata Steel 35 per cent. The partners plan to invest $US800 million ($A1.14 billion) to develop the project.
O'Keeffe said the Benga mine would produce 5.3 million tonnes per year initially, eventually ramping up to 20 million tonnes as transportation infrastructure improves.
Mozambique is working to restore a rail line connecting the coalmines in the northwestern Moatize district to the port city of Beira.
The line was made impassible by land mines during the country's 16-year civil war, which ended in 1992.
The World Bank is financing $US104.5 million ($A148.3 million) of the $US200 million ($A284 million) project. Bank official Jose Chembeze said construction should be completed in September, with the line expected to open to full traffic in January.
Mozambique has seen a boom in its mining sector as multinational companies move to tap resources that went untouched during the civil war.
Brazilian mining giant Vale broke ground last month on a $US1.3 billion ($A1.84 billion) mine in Moatize.
