Rio Tinto SAfrica coal project mulls power station

JOHANNESBURG, June 5 (Reuters) - Rio Tinto's (RIO.L) Chapudi coal project in South Africa, with estimated resources of 1 billion tonnes, is studying the possibility of supporting a power station to ease electricity shortages, an official said.

The project's Technical Manager Kuda Muchenje told a coal conference on Friday the company was engaging with utility Eskom [ESCJ.UL] and a few independent power producers to assess the generation potential of the project.

Eskom has been rationing electricity since early last year when the national grid nearly collapsed, forcing mines, smelters and other industries to shut for days and costing the biggest economy in Africa billions of dollars.

"There is significant thermal coal in that project ... with the right transmission and water infrastructure in place we think we can support a significant size power station," Muchenje said.

The project, in the northern Limpopo province, is in the pre-feasibility study phase, which the company expects to complete by the end of this year. (Reporting by Agnieszka Flak, editing by Anthony Barker)