The Mozambican government and the Australian company Riversdale Mining on Friday signed a mining contract under which Riversdale will develop an open cast coal mine at Benga in Moatize district in the western province of Tete.
At the ceremony held at the Riversdale training center in Tete city, Minster of Mineral Resources Esperanca Bias also delivered the Benga Mining Concession Title to Riversdale Managing Director Steve Mallyon.
The government approved the concession and the contract at the beginning of this month.
Mallyon said Riverdale has so far invested 60 million U. S. dollars in preparatory work. The full investment in the mine is estimated at 800 million dollars.
He expected the production to begin in late 2010, with a yearly output of 20 million tons.
According to Mallyon, the output will include 30 percent of high quality coking coal, 30 percent thermal coal and 40 percent waste.
He expects mining to continue at Benga for at least 25.
"At Benga we are committed to building value for our shareholders in a way that impacts positively on the Tete community," Mallyon said, adding the mine would create 1,500 direct jobs and 4,500 indirect jobs.
Mallyon said Riversdale will take its social responsibilities to local communities seriously, pledging support for achieving the United Nations Millennium Development Goals. Riversdale has already set HIV and malaria prevention programs into motion, in addition to support for local schools and health units, he said.
Besides Benga, Riversdale has 22 mining exploration licences in other parts of Tete province, where further major coal discoveries are likely. Mallyon said the company will further explore possibilities.
Source: Trading Markets