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Benga Project appoints EP services Contractor

A sign that Riversdale and Tata Steel’s Benga coking coal project in Mozambique’s Tete province is advancing is the appointment at the end of last year of coal and energy infrastructure specialist RSV Enco to supply engineering and procurement services to the project.

“Having previously done some ad hoc consulting work for the Benga project, RSV Enco participated in a tendering process against some 18 other companies for the engineering and procurement (EP) services contract,” RSV Enco’s CEO Neels Engelbrecht tells Mining Review Africa.

The Benga project, majority owned by Riversdale, with Tata Steel holding a 35% share, is located in northern Mozambique near Vale’s Moatize project. Benga has a resource of 2.1 billion tonnes of high quality coking and thermal coal, of which some 1.75 billion tonnes is less than 500 metres deep and amenable to opencast mining. Riversdale envisages the project eventually producing 20 million tonnes of coking and thermal coal a year.

This has been backed up by preliminary pilot scale tests which indicate that the Benga coking coals will be premium hard coking coal. A coke strength after reaction (CSR) result of 71 indicates this, as premium hard coking coals typically have CSRs greater than 65.

Taking into account the typical contract adjudication process, Enco would have needed to meet certain key criteria to be selected by the Australian based Riversdale as the EP contractor. The adjudication would have considered the competency of the RSV Enco team, the company’s track record and, of course, price. RSV Enco, formed a year ago as a linked enterprise to the Read, Swatman & Voight (RSV) group, is a programme and project management consultancy specialising in mining and energy infrastructure. In total it has a technical staff complement of some 90 people. At the peak of the Benga contract Engelbrecht expects some 20 to 50 people from the company will be involved in the Benga project work.

Enco has already established a sound track record, having done work for Sasol Mining, Total Coal South Africa, Lonmin, Koorfontein mines, and South Africa’s Central Energy Fund, among others. “At the moment mining remains 80% of our focus,” Engelbrecht says.

The Benga project is to be developed in stages, with the first phase of mining to produce 1.5 million tonnes a year of export hard coking coal and 500,000 tonnes a year of export thermal coal. Riversdale has initiated its feasibility work that will lead up to a bankable project, and Enco will be instrumental in taking the project towards this goal.

An initial scoping study was done, but Enco is now applying Project Management Body of Knowledge (PMBoK) principles to the project and putting the necessary structures in place. “This includes clearly defining the scope and doing baseline cost studies,” Engelbrecht says.

The scope of Enco’s contract does not cover the mine design, nor the processing plant design, but it is responsible for managing the rest of the infrastructure and logistics. Projects such as Benga, which is located in a part of Mozambique where little development has taken place, are by their nature logistics and infrastructure intensive.

“For example, the bridge over the Tete River is an access point to the rest of the continent that will have to be managed,” Englebrecht says. A possibility could be setting up a barge to cross the Tete for the supply of materials and equipment, and this will be one of the challenges for the project. It is part of the study being undertaken by RSV Enco.

However, site access for personnel is not bad, with daily commercial flights from Maputo to Tete followed by a short drive to site.

Part of the study being undertaken by Enco involves the Sena rail line, which is being refurbished, for the transport of coal. The possibility of using the Zambezi River to barge coal to the coastal town of Chinde is also being studied.

Diesel or fuel oil generators will be used as the most cost effective standby power option, and with 33 kV grid access available in the area near the project site, Enco is working with the client in negotiating a deal with Mozambique’s state electricity utility EdM. “It is important to secure power supply capacity for the project,” Englebrecht says.

Water for the project will be accessed from the Tete River and wells, and the company is working with Golder & Associates in terms of the water balance and management planning.

The work on the ground that Enco is currently involved in includes the construction management related to putting into place offices, kitchen facilities and accommodation on site, preparing the site for a construction camp, supervising the construction of access roads, and setting up workshops and a training centre at Tete.

“We are also in the process of registering a company in Mozambique, which will focus on ensuring that mostly local people are employed on the project,” Englebrecht says.

“In about three months we expect to award some bulk earthworks and bulk civils contracts related to Benga.” Riversdale envisages the first phase of the project being in place in 2010. It then envisages a second phase, using the new Beira coal terminal or the river barging option, to be in place soon after. This second phase is intended to allow economic expansion to fully use the available export option.

There will be synergies offered by Vale’s development of the Moatize project, in particular as far as establishing a skills base in the region is concerned and the development of overall infrastructure that will benefit the area as whole.

The project, while already a substantial one for Enco, does give it further scope for participation in future phases and helps establish the group in a region that is expected to become a major new coal mining centre.