Oz to go down under in Moz

Maputo - The Mozambican government has given the green light to an Australian mining firm's plans to build a $800m coal mine in the country's northwest, the company said on Monday.

The mining company Riversdale plans to produce 20-million-tonnes a year from the coking and thermal coal project and will also build a 2 000-megawatt-a-day power plant.

"Riversdale is pleased to announce that following completion of an Environmental Impact Study in mid-2009 the (Mozambican environment ministry) has granted approval for the project to proceed," the company said in a statement.

Riversdale has predicted the Benga project will produce some of the lowest-cost coking coal in the world.

The company estimates the mine's initial reserves at 273 million tonnes - 181 million tonnes of proved reserves and 92 million tonnes of probable reserves.

Riversdale holds a 65% stake in the mine and Indian firm Tata Steel 35%.

The two companies plan to develop the project in three stages, beginning production at 5 million tonnes per year and ramping up to 20 million tonnes as Mozambique's transportation infrastructure improves.

Riversdale said Mozambican environmental authorities had approved all three stages of the project.

"It actually covers the project to full capacity, a 20-million-tonnes run of mine," Riversdale spokesperson Bill Kemmery told AFP.

Mining companies say the northwest Mozambican province of Tete is one of the world's last great unexploited coal reserves.

Mozambique has seen a boom in its mining sector as multinational companies move to tap coal beds that sat idle during the country's 16-year civil war, which ended in 1992.

Brazilian mining firm Vale broke ground last year on a $1.3bn mine in Moatize.

The government has awarded more than 100 mining licenses in all.

- Sapa