Name and Location
Benga power plant (BPP), Tete province, Mozambique.

Client
Rio Tinto Coal Mozambique (through its acquisition of Riversdale Mining).

Project Description
The BPP will help to eliminate the regional power shortage and supply Rio Tinto’s Benga coal mine, which will supply thermal coal to the plant.

The BPP will be developed in two phases.

Phase 1 envisages the development of a 600 MW coal-fired, mine-mouth power plant on Riversdale’s Benga mining concession. Power from this initial phase will be distributed to South Africa, using the existing 220 MW transmission infrastructure, as well as to Rio Tinto’s Benga and Zambeze coal projects and also to the national power network.

Phase 2, as contemplated, entails the progressive upgrade of the power plant to 2 000 MW, depending on the proposed development of new regional transmission infrastructure namely the Mozambique Backbone Transmission project, the ramp-up in mining operations at Riversdale Mining's mining concession, or the development of new mining operations at adjacent tenements.

Value
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 more than $1-billion to develop.

Duration
Still to be determined.

Latest Developments
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 project.

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 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.

The project has allocation on existing transmission capacity and Rio has indicated that it will seek to use this with additional capacity as and when it becomes available.

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 of the project 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 start development of the BPP in 2014, with construction expected to take three years.

Careful consideration is also being given to water use within the power plant and its location. Rio is currently negotiating with local water authorities on licensing provisions to draw water.

Key Contracts and Suppliers
None stated.

On Budget and on Time?
Not stated.

Contact Details for Project Information
Rio Tinto media contact, Tony Shaffer, tel +44 20 7781 1138, cell +44 79 2004 1003, fax +44 20 7781 1802 or email media.enquiries@riotinto.com.