After a review by 35% stakeholder and joint venture partner Tata Steel, the project will then be considered for development approval.
The feasibility study has outlined development for the proposed $US800 million-plus surface coal mine to take place in three stages.
Initial development will have the mine producing 5.3 million tonnes per annum of run-of-mine coal, resulting in 1.7Mtpa of hard coking coal and 300,000tpa of export-quality thermal coal.
Mine production is planned to start in early 2011, with exports expected to kick off on the commissioning of the third party-operated Sena railway and refurbishment of the coal export facility at the Port of Beira, which Riversdale says is “presently anticipated for the second quarter of 2011”
The second-stage development of Benga will expand ROM production to 10.6Mtpa and generate 3.3Mtpa of coking coal and 2Mtpa of thermal coal.
Riversdale said the expansion was targeted to begin no later than 2014 and would coincide with the opening of a new multi-user coal terminal at Beira, along with the start of barging operations.
The next expansion detailed in the feasibility study will have Benga producing 20Mtpa of ROM coal and includes an extra two coal preparation plant modules, with this development dependent on market conditions and available coal chain capacity.
“The feasibility study has confirmed that the project exceeds Riversdale’s required rate of return with capital costs of $US260 million for Stage 1 [excluding working capital] and an additional $150 million for Stage 2,” Riversdale said.
Under the feasibility study, the truck and shovel operation will use 100t and 150t offroad trucks and hydraulic excavators, with mining carried out by a contracting company.
The average ROM strip ratio has been calculated to be 2.8 over a 25-year mine life.
Riversdale said it had adequately funded its 65%, $US169 million share of the Benga Stage 1 development with its cash reserves of $A295 million and minimal debt.
“Financing for subsequent phases of the project will be progressed at a later stage,” the company said.
Macquarie Private Wealth recently set an “underperform” rating to Riversdale because of concerns about significant infrastructure hurdles in Mozambique and future funding needs for the Benga open cut project.
Benga has 181.3Mt of proved coal reserves and 92Mt of probable reserves.
Shares in Riversdale surged 43c to close at $6 yesterday.
