The company said it planned to operate an open pit at the project site with low strip ratios, producing export thermal coal and using lower grade coals to feed the adjacent thermal power station.

Definitive feasibility studies for both the mine project and proposed power station are on track and nearing completion.

Ncondezi recently increased the project’s JORC coal resource to 4.655 billion tonnes, up from 1.8Bt.

Ncondezi reports the mine has potential to produce 10 million tonnes of coal per annum over a 20-year mine life, with initial output consisting of 4Mtpa (2Mtpa export quality and 2Mtpa power plant feedstock).

First production is anticipated for the second half of 2015.

Ncondezi chief executive Nigel Walls said the project demonstrated significant progress in developing a large scale, strategically located coal resource for the company.

“The long-term fundamentals for the seaborne thermal coal market remain strong as demand growth is driven by the build out of power generation in Asia,” he said.

“The recently published Wood Mackenzie coal marketing study confirms that we have a saleable product that is attractive to Asian customers.

“Ncondezi is also well placed to capitalise on the significant potential for power generation in southern Africa.

“Our power strategy is closely aligned to the Mozambican government’s stated policy of in-country beneficiation as they consolidate their position as a leading regional power player.”

Ncondezi said the permitting process for the project was already underway.