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Jun 21, 2012

Some power to flow to Southern African grid from Benga, Rio says

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Mining group Rio Tinto says there is likely to be an offtake allocation available for the Southern African power pool from its proposed Benga coal-fired power generation plant, which is being prepared for development in the Tete region of northern Mozambique.

The company is currently seeking expressions of interest from developers with established records of developing, constructing and operating power plants. It also wants the developer to take an equity position in the project.

The capacity of the Benga power project (BPP) is yet to be determined. But a modular deployment is envisaged, with the plant likely to have an initial capacity of between 400 MW and 600 MW.

Environmental sanction has been secured for a far larger 2 000 MW facility, which is to be located on the miner’s Benga mining concession. The Benga mine has already necessitated the development of other infrastructure, including the rehabilitation of the 600 km Sena railway line, the upgrade of the Port of Beira and the construction of a 20-million-ton-a-year coal terminal.

A Rio Tinto Coal Mozambique spokesperson says the power is primarily required for the group’s own consumption, to enable it to operate mining equipment and infrastructure, as well as a coal processing plant.

“Our plans to grow our business in Mozambique could require more than 200 MW into the future. The power plant’s construction will be modular, so that it can provide flexibility in operation and flexibility to scale up to meet future requirements,” the spokesperson explained.

But Rio also has an agreement to sell power to the State-owned Electricidade de Moçambique (EDM). “This will then provide them [EDM] with the ability to service Mozambique demand . . . [and] there will also be an offtake allocation available to the Southern African power pool.”

The project has allocation on existing transmission capacity, and “we will seek to use this, along with additional capacity as and when it becomes available”. It has been reported that the Benga power plant has also been factored into the ‘Mozambique Regional Transmission Backbone Project’, which outlines the building of new transmission infrastructure in the Southern African country.

During the prequalification of potential developers, Rio says it will encourage local companies and that it also intends using local suppliers and labour wherever possible.

“The timing will depend on when the final design of the plant has been determined, and all approvals have been completed. At this stage, it is planned to commence development of the BPP in 2014 and construction is expected to take three years.

It has been reported previously that the project, which was initially proposed by Riversdale Mining, the previous developer of the Benga coal mine, could cost about $1-billion to develop.

In 2011, Rio acquired Riversdale and the large-scale Benga and Zambeze mines. The company is on record as stating that Mozambique is likely to emerge as a major exporter of hard coking coal.

The spokesperson says careful consideration is being given to water use within the power plant and its location. “We are also looking in our design at ways to reduce water use in the local area by recycling treated wastewater to the nearby coal preparation facilities. We are currently speaking with local water authorities on licensing provisions to draw water.”
 

Edited by: Creamer Media Reporter
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