Aim-listed coal developer Edenville Energy, which is being impacted by heavy rainfall at its Rukwa coal project, in Tanzania, is taking steps to stockpile run-of-mine (RoM) coal to mitigate, as far as practicable, the impact of the rainy season, which is under way.
The subsequent production of washed coal is expected to be reduced for as long as the rains continue; however, Edenville notes that this is not anticipated to reduce previously expected overall full-year output.
The company has agreed terms to supply 2 000 t a month of washed coal, effective from June, at a now agreed pre-transport price of $98/t at the mine gate.
Prior to June, contract supply volumes under this agreement are subject to variation based on production figures at Rukwa, given the ongoing rainy season.
It is expected that the net price achieved by the company will be about $55/t.
In addition, the miner notes that discussions regarding the previously-announced sale of 1 500 t a month of coal fines remain ongoing.
Edenville is also investigating the costings and lead time for an additional wash plant at Rukwa, in particular in relation to ongoing contractual discussions that are being held with potential customers that could lead to additional demand of between 8 000 t and 10 000 t a month of washed coal.
As previously notified, it is likely that, to meet demand of over 10 000 t a month of washed coal, an additional wash plant will be required at Rukwa and the company is exploring non-equity avenues of finance to fund a new wash plant.
Meanwhile, Edenville says it has been advised that Tanzanian courts will address, at a hearing this month, Edenville’s claim for the reversal of the transfer of Upendo Group’s 10% economic interest in the local joint venture.
Upendo holds the licences governing the Rukwa project, and Edenville intends to convert its 10% economic interest into a 10% direct holding on the principal production licence.
Based on legal advice Edenville has received, it says the claim is being “robustly defended”.