The Mozambique government is considering an application by Rio Tinto PLC (RIO.LN) for acquiring a substantial stake in Australia's Riversdale Mining Ltd. (RIV.AU), which owns two coking coal mines in the African country, Mozambique Mineral Resources Minister Esperanca Bias said Tuesday.

"[Approval] is a normal procedure under our legislative rules, since Riversdale's mines are in Mozambique," Bias told reporters after meeting Indian Coal Minister Shriprakash Jaiswal.

Riversdale owns the Benga and Zambezi coal mines in Mozambique, which contain 4 billion and 9 billion metric tons resources, respectively.

"We expect the Benga coal mines to start production by December," Bias said.

Rio Tinto has so far failed to reach the majority stake it was chasing in Riversdale Mining, as major shareholders--India's Tata Steel Ltd. (500470.BY) and Brazil's Cia. Siderurgica Nacional (SID)--who together hold a 47% stake in company, haven't said whether they plan to sell out to Rio Tinto or hold on to their stakes.

Rio Tinto has said that it is willing to accept the position of Riversdale's largest shareholder if it fails to win a majority stake, though in such a scenario it may not be able to push through its plans for the Africa-focused coal company.

-By Saurabh Chaturvedi, Dow Jones Newswires; 91-11-4356-3358; prasenjit.bhattacharya@dowjones.com
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