Riversdale said the mining contract covered all aspects of the proposed $US800 million-plus open cut mine, including exploration, feasibility, development, operations, fiscal regime, rehabilitation and mine closure requirements.
Riversdale executive chairman Michael O’Keefe said the granting of the contract represented a significant event for the company and was an outstanding achievement.
A joint venture between Riversdale and Tata Steel, Benga is aimed to start producing coal in 2010.
The bleaker times for Africa’s mining industry should lower development costs, as Riversdale said it would take into account the significant downward shift in underlying cost structures in the project’s feasibility study, which is currently underway.
Major savings are expected to be made in the cost of key contractors and capital equipment.
“The mining industry in Africa is experiencing the effects of the downturn as elsewhere in the world,” O’Keefe said.
“However, Riversdale Mining is fortunate enough to have cash in the bank and a project primed for development.
“This is a great time to be scaling up a project in terms of the availability of and access to competitively priced services and equipment.”
Riversdale aims to ramp up to full production of 20Mt per annum, including 6Mtpa of hard coking coal and 6Mtpa of thermal coal of saleable product.
Benga has 181.3Mt of proved coal reserves and 92Mt of probable reserves.
Shares in Riversdale closed down A1c to $4.28 yesterday.