In a filing to the Bombay Stock Exchange, Tata Steel said the coal quality progress results for Benga deposits near Tete in Mozambique indicates that both hard coking and thermal coal would be of premium quality and make the venture a "world class project".
It will also give Riversdale an opportunity to be a globally competitive coking coal producer, it added.
Tata Steel had entered into a joint venture with Riversdale Mining on November 30 last year, to develop a hard coking and thermal coal project at key coal exploration license held by Riversdale in Mozambique.
Tata Steel said further work is being undertaken to optimise the potential products from the Benga deposit.
"In particular, liberation studies and mining optimisation will be undertaken to assess opportunities to increase coking coal yields and optimise the overall properties of the coal products," the company said.
Tata Steel said the Benga hard coking coal compares favourably against the premium Bowen Basin coals found in German Creek and are even superior in quality.
As for thermal coal, the steel major said it would be suitable for mine mouth power stations.
It said the power produced will be used for supplying to the mines and will also find markets in Southern African Power Pool, which is currently experiencing acute power shortages.
