Name and Location
Mbeya (formerly Rukwa) coal-to-power project (MCPP), Tanzania.

Client
Kibo Mining.

Project Description
The project comprises two prospecting licences and two prospecting licence applications in south-western Tanzania, just south of Lake Rukwa.

The MCPP is expected to deliver 109-million tons of thermal coal over its mine life, with the coal to be fed into a 250 MW to 300 MW mine mouth thermal power station.

Stage 1 of the project comprises the completion of a bankable feasibility study on the coal mine and a prefeasibility study (PFS) on the power plant by December 2014.

Stage 2 will comprise all development and construction activities relevant to the mine and the power plant, with Stage 3 encompassing the commissioning and operation of the Mbeya coal mine and the Mbeya power station.

Net Present Value/Internal Rate of Return
Not stated.

Value
The project is estimated at $760-million.

Duration
Not stated.

Latest Developments
Kibo has reported that it can now “significantly increase” the pace at which feasibility work at its MCPP can be concluded, after construction and engineering company Chinese Shandong Electric Power Construction Corporation III’s (Sepco III’s) board approved a joint development agreement.

The agreement will also increase its ability to secure more investors and finance for MCPP.

The board approval has paved the way for Sepco III to make an equity  investment in the MCPP, to a maximum of 15% of total equity in the special purpose vehicle that will ultimately hold the MCPP asset, while Kibo will hold the remaining 85%.

This investment will be made towards the completion of the definitive feasibility study (DFS) in October. Sepco III will also retain specific responsibility to lead the power generation component of the DFS and Kibo will lead the mining component.

The partners will also collaborate on identifying and reviewing construction providers and power plant operators to build and operate the completed MCPP and the appropriate financing structure for the MCPP construction process.

In addition, the DFS work will include negotiation and agreement of  the terms of a power purchase agreement, implementation agreement and environmental-impact assessment.

Key Contracts and Suppliers
Standard Bank (financial adviser).

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.