HomeEnergy MineralsUS$5 billion power plant for Mozambique

US$5 billion power plant for Mozambique

Riversdale drill
team at work in
Maputo, Mozambique — MININGREVIEW.COM — 21 April 2008 – In a move to help ease the deteriorating regional electricity shortage, Australian-listed coal producer Riversdale Mining Ltd. is planning to build a 2 000-megawatt power plant in Mozambique’s Tete province.

Bloomberg News quotes company CEO Michael O’Keeffe as saying that the US$5 billion (R40 billion) project will produce 500 megawatts of electricity by 2012, and reach full capacity by 2015. Riversdale – an established coal explorer in Mozambique – would mine coal to fire the power plant.

The Bloomberg report adds that the project may supply electricity to other countries in the 14-nation Southern African Development Community (SADC), where power demand is outstripping supply.

Neighboring South Africa is currently raising imports from Mozambique’s Cahora Bassa hydropower plant to ease the shortages it is experiencing, and Zimbabwe, Zambia, Namibia and Botswana are also facing power deficits.

The electricity generated “could provide solutions to the SADC regional power crisis,” O’Keefe said in an interview here. “Mozambique will become a new coal frontier of the world,” he added.

“Riversdale is conducting a feasibility study for the Tete project, which would tap coal deposits of more than 1.9 billion tonnes,” O’Keefe said. “The project will eventually be owned by a specialist energy company in partnership with the Mozambique government,” he explained.

Brazil’s Compania. Vale do Rio Doce is building the southern hemisphere’s largest coal mine in Mozambique. The US$3 billion (R24 billion) Moatize project will produce 26 Mtpa, and may also include a power plant.

Indian steel giant Tata Steel Ltd. paid US$94 million (R750 million) late last year for a 35% stake in Riversdale’s Benga and Tete exploration licenses in the southern African country.