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Riversdale Mining Ltd: Mining Contract secured for Benga Coal Project in Mozambique

Wednesday, April 29th, 2009

Riversdale Mining Limited is pleased to advise that the Company has received approval from the Government of the Republic of Mozambique for the Mining Contract for the Benga Coal Project in Mozambique.
The granting of the Mining Contract represents a significant event as the Company moves towards commencement of the Benga Coal Project. The project will involve Riversdale Mining progressively developing a 20 Million tonnes (Run of Mine) per annum hard coking and thermal coal mine at Benga in the Moatize area, with an estimated capital investment of more than US$ 800 million.
The Executive Chairman of Riversdale Mining, Mr Michael O’Keeffe, said: “This is an outstanding achievement and is the outcome of years of hard work by our management and staff on the ground in Mozambique. We have invested significantly in this project, and we are delighted to have received endorsement through this approval”.
The terms of the Mining Contract have been agreed by the Council of Ministers of the Government of Mozambique and Riversdale Mining has received a Decree signed by the Prime Minister (Decree # 17/2009). The Decree approves the Mining Contract and its terms and conditions and delegates authority to the Minister of Mineral Resources to execute and implement the Mining Contract.
The Mining Contract establishes the particular terms which govern the development and implementation of the Benga Coal Project. It covers all aspects of the proposed development including exploration, feasibility, development, operations, fiscal regime, rehabilitation and final mine closure requirements.
The approval and execution of the Mining Contract is in conjunction with the issuance by the Government of the Mining Concession, which is the formal documentary title for the mineral rights for coal and associated minerals, replacing the existing Exploration Licence over the tenement area.
Mr O’Keeffe said: “The Mining Contract, with the support of the government and the Honourable Minister of Mineral Resources, Esperança Bias, provides a basis for Riversdale Mining to be producing coal at Benga in 2010. The approval underlines our belief in the Moatize basin as a mining region of immense potential and will now allow us to deliver on the commitment we have given the government in Mozambique”.
Following the awarding of the Mining Contract, the terms and conditions will be incorporated into the Benga Project Feasibility Study, now due for completion in the current quarter.
The Feasibility Study is now being finalised and will take into account the significant downward shift in underlying cost structures following the impact of the global downturn on the mining industry.
Riversdale Mining has seen a reduction in some of the major costs associated with bringing a large mining project on-line, including the cost of key contractors and capital equipment.
“The mining industry in Africa is experiencing the effects of the downturn as elsewhere in the world. However, Riversdale Mining is fortunate enough to have cash in the bank and a project primed for development. This is a great time to be scaling up a project in terms of the availability of and access to competitively priced services and equipment,” Mr O’Keeffe said.
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