Australian coal producer Riversdale Mining has received environmental approval from Mozambique for the construction of its Benga power plant.

The power station, which would be developed in two stages, would help meet increasing regional demand for electricity in Mozambique and South Africa, the coal-miner said in a statement on Monday.

The first stage of the project would see a 500 MW coal-fired, mine-mouth power station being constructed.  Stage one would be completed during 2013, using existing transmission assets.

The stage two development would see an upgrade in capacity of around 2 000 MW, depending on the proposed transmission backbone and other transmission capacity.

Riversdale said in a statement that it had also been granted access to the existing Mozambican power transmission network.

The company said that it was in discussions with various parties to conclude power purchase agreements.

The proposed Benga power plant will be located in the Tete province of Mozambique in close proximity to Riversdale Mining’s Benga coal project, which will supply thermal coal to the plant.

The Benga project is held in a joint-venture between Riversdale Mining and India’s Tata Steel.

Last week, the company announced that it had received environmental approval for the 20-million tons a year coking coal mine.

The mine would initially produce 1,7-million tons a year of coking coal and 300 000 t/y of export thermal coal.

The phase-two expansion would boost run-of-mine (RoM) production to 10,6-million tons a year, lifting output to 3,3-million tons a year of hard coking coal and two-million tons a year thermal coal. In the final stage, RoM would increase to 20-million tons a year.

Benga has a coal resource of four-billion tons.