Riversdale Mining

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When IRJ last spoke to Riversdale Mining Limited, a mining house from Sydney, Australia, the company was announcing their plans to go ahead with the development of a $800-million coal mine in Mozambique in conjunction with Tata Steel Ltd, India’s biggest metal producer. The Benga project was estimated to produce six million metric tonnes of coking coal and two million tonnes of thermal coal for export.

Companies operating in the region allege that the northwest Mozambican province of Tete is one of the world’s last great unexploited coal reserves, and Mozambique has seen a boom in its mining industry as multinational companies begin to move in. Just last year, Vale broke ground on a 1.3-billion-dollar mine in Moatize. All in all, the government has awarded 100 mining licenses to international enterprises.

Progress has certainly been made. Since Riversdale last talked to us, they announced on January 11th that the Mozambican government has given the green light to their plans to build the coal mine in the country’s northwest. Riversdale elaborated on the project, announcing its new plans to produce 20 million tonnes a year from the coking and thermal coal project and also a 2,000-megawatt-a-day power plant.

In a statement, Riversdale said that they completed an Environmental Impact Study, which was the last piece of the puzzle in order to have the project approved.

Scope and scale

The company estimates that the mine’s initial reserves will be 273 million tonnes—181 million tonnes of proven reserves and 92 million tonnes of probable reserves. Riversdale holds a 65 percent stake in the mine, with Tata owning 35 percent.

Tata and Riversdale intend to develop the project in three stages, beginning production at 5 million tonnes per year and ramping up to 20 million tonnes. Ramping up will occur as Mozambique’s transportation infrastructure improves.

Riversdale’s Bill Kemmery told AFP that the government’s approval covered all three stages of the project which “actually covers the project to full capacity, a 20-million-tonnes run of mine.”

Steven Mallyon, Riversdale Managing Director, credits the success of the project to a strong and dedicated team at Riversdale. He is a long-term player in the mining industry and has over 20 years experience in the natural resources and construction material sectors, in senior executive roles and mining experience in Australia, Africa, South America as well as emerging markets in Asia.

Strategy for growth

Mallyon says Riversdale’s growth strategy revolves around the acquisition of upgrading assets where possible and conducting exceptional exploration where not. Mallyon says that the Benga project was a must for Riversdale, who were presented with “massive” coal resource.

When we last spoke, Mallyon said that Riversdale has been working long and hard on the Benga project. “We’ve been very focused on the Benga Coal Project. Our efforts have gone into getting that project through the feasibility study to where it is today.”

Riversdale initially started to drill the seven tenements that it acquired, one of which was substantial in size, at 25,000 hectares. The results pleased the Riversdale team. The past 12 months have seen 120 drilled holes and 40,000 metres of explored ground. The conditions for Riversdale to mine have been perfect, as the area is very flat, near to infrastructure, and also includes an international airport on the lease. Roadways are also accessible, which has been an advantage for Riversdale.

Sustainability in the community

This most recent project announcement complements the success that Riversdale has had in and around its communities. The company aware of the impact the company’s mining could potentially have on the surrounding communities and has integrated sustainability initiatives into the project from day one.
Mallyon told IRJ last year that: “The first investment, apart from the drilling, was to build a training centre because we knew one day we will need people on the project to operate the machinery, the environmental systems there, do all of the accounting and the rest.”

The training centre currently offers basic training to the community, and this local approach is needed in the mining community. Mallyon said: “Our view on commitment to the country has been to employ locally. At the moment, we have about 150 employees in Mozambique, 90 per cent of which are locals.”

Riversdale has also introduced a number of programs focused on health education—a paramount subject of concern for the region—including a malaria prevention program and AIDS awareness and prevention. A mobile clinic has been built for locals to use for health questions and treatments.

A look to the future

The company plans to ramp up production on the Benga project by using the Zambezi river for barging and hopes for an increase from two to six million tonnes produced per year.

“Beyond that, our plan is ramp up river barging; the other is to access another rail line which is being built in Melaka, about 900 kilometres from the site. This is where it gets interesting because with the Zambezi project and Benga we believe that we will have the ability to produce between 30 and 40 million tonnes,” Mallyon says.

With developments impending for the new mine, and a focus on the African coal market, Riversdale will have no trouble reaching its next goals.

www.riversdalemining.com