signed for coal fired power station

MOU signed for coal fired power station
Riversdale Mining Limited (ASX: RIV) today announced that the Company has signed a
Memorandum of Understanding (“MOU”) with Elgas SARL to review the development of a
thermal coal fired power station near Riversdale’s coal tenements in Mozambique.
Elgas is a Maputo-based joint venture company formed to explore energy opportunities in
Mozambique. The group includes Eskom Enterprises, Electricidade de Mozambique (EDM),
Empresa Nacional de Hidrocarbonetos de Mozambique, African Legend and Consultinvest and
supplies electricity to customers in Vilanculos and the Bazaruto group of islands.
Under the terms of the MOU, Elgas and Riversdale intend to jointly undertake a feasibility study
for the development of a thermal coal fired power station with a capacity of approximately 300
MW in the area of Tete, Mozambique. Should these studies prove the feasibility of the project,
opportunities will be created for other Mozambican investors to participate in the power project.
As part of this project, Riversdale and Elgas will also review the terms under which Riversdale
may sell and deliver coal produced from its Mozambique coal project to the new power station.
They will also consider the terms under which EDM and Eskom may purchase electricity
generated by the power plant and the transmission of electricity into the southern African grid.
Riversdale Chairman and CEO Mr. Michael O’Keeffe said that the proposed power station is
ideally placed to service some of the rapidly increasing demand for power and can help overcome
some of the supply issues governments and industry in the region are currently facing.
“We see significant opportunities for our coal project in Mozambique, not only for coking coal
exports, but also for the thermal coal to be an integral component of the power generation sector
in the years ahead. This includes local demand, but will also involve supplying the increasing
needs of the South African economy,” Mr. O’Keeffe said. “As part of this process, we will be
commencing discussions with infrastructure providers in the energy sector in relation to the
establishment and operation of the power station.
“Elsewhere, the major South African utility business Eskom has been quoted as saying it will
spend as much as R97-billion over the next five years to boost South Africa’s power supplies. We
believe that our relationship with Elgas – and its venture partners which includes EDM and
Eskom Enterprises – will position Riversdale well for future developments in the region.”