Indian steelmaker Tata Steel and its joint venture (JV) partner Australian miner Riversdale may start production from the Benga coal project in Mozambique in the next five years.
According to a statement filed by Riversdale to the Australian Stock Exchange, production is targeted to commence no later than 2014.
The Benga project is expected to yield over 20 million mt of the dry fuel every year, said Riversdale in its filing.
As SteelOrbis reported in November 2007, Tata Steel and Riversdale signed a joint venture agreement for the development of a hard coking and thermal coal project at key coal exploration tenements held by Riversdale in Mozambique. Paying AU$100 million (approximately US$88.2 million) to acquire a 35 percent project interest, Tata Steel also secured a key position in the JV formed to develop the Mozambique Coal Project, as well as a 40 percent share of the off-take for coking coal to feed its Corus facilities in the UK and Europe.
Riversdale has stated that it has completed the feasibility study for the project and has forwarded the same to its JV partner for its comments.
The feasibility study contemplates three stages of development of the coking coal-rich reserves, the company said, adding that it is adequately funded for its 65 percent share of the Benga stage 1 development, which stands at US$169 million.
In May 2009, The Mozambique government awarded a mining contract to Tata Steel JV for the Benga coal project.