Name of the Project
Mbeya coal-to-power project (MCPP).
Location
Tanzania.
Client
Kibo Mining.
Project Description
The integrated bankable feasibility study (IBFS) on the MCPP has concluded that the MCPP is financially, technically and operationally a very robust project.
The IBFS comprises an integration of the definitive mining feasibility study (DMFS), the definitive power feasibility study (DPFS), the integrated financial model for the MCPP and all the other relevant technical studies on the MCPP to date.
The MCPP comprises a 122-million-tonne coal resource, of which 85.9% qualifies for inclusion in any future reserve statement. Of this, 39-million tonnes is included in the pit design and is sufficient to satisfy the required indicative coal requirement of 39-million tonnes for 30 years.
It has been proven that constant coal production over the total life-of-mine can be achieved.
The mining method developed for the Mbeya coal mine has been confirmed as modified terrace mining. Overburden will be removed using a free dig (truck-and-shovel) method, with coal seam and interburden mining using mechanised continuous surface mining. The DPFS has concluded that the power plant will require coal with a calorific value of 12.85 GJ/t.
Net power that will be generated has been estimated at 1 840 GWh/y.
Average coal and limestone consumption has been estimated at 1 497 432 t/y (as fired) and 110 359 t/y respectively.
Jobs to be Created
Not stated.
Net Present Value/Internal Rate of Return
The MCPP DMFS estimates an internal rate of return of 69.2%, with a payback of 2.4 years.
Value
The MCPP DMFS estimates a peak funding requirement of $17-million.
No new figures have been released in the DPFS.
Kibo Mining remains restricted in its ability to release certain detailed information relating to the IBFS, owing to the company is being engaged in highly confidential discussions with various parties, including regulatory authorities.
The release of certain detailed financial information could result in a breach of Kibo’s confidentiality obligations, and is commercially sensitive. This could harm the company’s ability to successfully complete negotiations.
The most recent figures, released in the April 2016 DPFS, confirmed the total estimated project cost of the thermal power plant as below the cost estimate stated in the power-prefeasibility study (power-PFS) released in 2014. The power-PFS estimated the project’s total cost, depending on the plant option selected, at between $640-million and $760-million.
Duration
Not stated.
Latest Developments
Kibo Mining has completed the environmental- and social-impact assessment (Esia) for the MCPP, and is now awaiting certification.
The completion of the Esia work marks another major step forward in the development of the MCPP, which has reached an advanced stage of development.
The company, meanwhile, remains in ongoing consultations with the Tanzanian government and State-owned entities, including the Ministry of Energy and Minerals (MEM) and the Tanzania Electric Supply Company (Tanesco), regarding a power purchase agreement (PPA).
“The PPA is the most critical commercial agreement for the MCPP,” the company has stated, adding that it is impossible to start negotiations with Tanesco without certainty on the key economic parameters and indicators of the project.
The company has further stated that while there is no definitive timeframe for the Esia certification process to be completed – owing to the consultative nature thereof – and with the special mining lease still outstanding, it does expect the process to happen much quicker than usual.
Key Contracts and Suppliers
Sepeco III (engineering, procurement and construction contractor) and GE (equipment, technology and services).
On Budget and on Time?
Not stated.
Contact Details for Project Information
Kibo Mining, tel +353 91 865367, fax +353 91 755066 or email info@kibomining.com.