Name of the Project
Rukwa coal-to-power project (RCPP).

Location
Tanzania.

Project Owner/s
Edenville Energy.

Project Description
A feasibility study completed on the project has indicated an economically sound project with a 30-year, 120 MW coal-fired power plant. The power plant could possibly be scaled up to 300 MW.

The Rukwa coalfields comprise the Mkomolo, Namwele and Muze deposits.

The project hosts 173-million tons of measured and indicated coal, sufficient to support the station over the life of the project.

Output has been estimated at 10 000 t a month.

Potential Job Creation
Not stated.

Net Present Value/Internal Rate of Return
Independent power modelling consultancy Diamond Energy has completed a new financial model for Aim-listed Edenville Energy’s RCPP.

The new financial model builds on and validates the results and integrity of the financial model compiled from the results of the 2015 power plant feasibility study.

It has resulted in a 14% increase in the project’s pretax net present value, to $252-million, from the previous estimate of $220-million, while the internal rate of return has improved to 23.4%, compared with 23.1% in the 2015 study.

Capital Expenditure
The capital expenditure to deliver a combined mine and 120 MW power plant is estimated at between $180-million and $200-million.

Planned Start /End Date
Not stated.

Latest Developments
Edenville has reported that it is nearing the maturity of a funding agreement it signed with Lind Partners in November 2018 for $580 000.

The company advised in a statement published on November 27 that it had entered into discussions with Lind on repayment terms.

The directors are confident that mutually agreeable terms can be agreed with Lind on later repayment; however, it remains uncertain whether these discussions will result in a favourable outcome for Edenville.

Should Edenville be unable to reach mutually agreeable terms with Lind, there may be material uncertainty regarding the company’s ability to continue as a going concern, unless the company raises further capital.

However, Edenville says it has several supportive significant shareholders whom the directors believe will continue supporting the company in such an event.

Moreover, the company still expects to hand over its Rukwa coal mine operations to its strategic partner Infrastructure and Logistics Tanzania Limited (ILTL) shortly.

Both parties expected the transition to take place before the end of November; however, owing to ongoing administrative issues between the Tanzanian government and ILTL pertaining to work permits, principally as a result of a backlog caused by Covid-19, the transition has been delayed.

Edenville expects that these administrative issues will be resolved in the short term and will confirm a new start date.

Edenville energy subsidiary Edenville International, in Tanzania, entered into a sales and marketing agreement with Dubai-based MarTek Global in August.

MarTek is a sister company of ILTL.

The sales and marketing agreement follows a coal mining agreement that Edenville signed with ILTL, which provides for a fixed-rate mining and processing contract at the Rukwa coal project.

The contract mining will be conducted for four years once the agreement becomes effective, with an automatic renewal unless terminated by either party.

MarTek will provide an anchor tenancy at Rukwa of 3 000 t a month of washed coal, increasing to 5 000 t of coal a month over the first 12 months of the contract term.

MarTek’s purchase price for Rukwa coal is the highest that Edenville has achieved to date and should provide the company with a healthy margin on tonnes sold.

Edenville International and MarTek will share marketing and sales responsibilities in Tanzania for any sales above the anchor tenancy.

MarTek will have exclusive rights to market Rukwa coal internationally at a pre-agreed sales price, with any transport costs to be added to the sales price.

MarTek will leverage its logistics capabilities to supply these new markets.

Edenville International, MarTek and ILTL have agreed to focus on maximising production from the Rukwa project, with a target of increasing capacity in the near term to about 12 500 t a month.

The company advised on November 27 that it was continuing to fulfil its prepurchase orders for coal.

Key Contracts, Suppliers and Consultants
Not stated.

Contact Details for Project Information
Edenville Energy, tel +44 20 7653 9850 or email info@edenville-energy.com.