Kibo Mining is in advanced discussions with Tanzania Electric Supply Company (TANESCO) and the Ministry of Energy to sign a Power Purchase Agreement (PPA) for its flagship coal to power project.
The announcement comes at a time of press speculation, which suggested that a PPA had already been signed for the 300Mw Mbeya Coal to Power Project (MCPP).
“Contrary to press speculation, the company has not yet signed a PPA,” Kibo said in a statement.
“However, it remains in advanced discussions and the PPA will enable the company to move towards execution and conclusion of the final development phase of the MCPP.”
The Mbeya Coal to Power Project (‘MCPP’), comprises the development of the Mbeya Coal Mine, a 1.5Mt p/a mining operation and the Mbeya Power Plant, a 300 MW mine-mouth thermal power station.
The Mbeya Coal Mine has a defined 120.8 Mt NI 43 101 thermal coal resource.
The 300 MW mouth-of-mine thermal power station has long term scalability to 1000MW, with a full Power Feasibility Study highlighting an annual power output target of 1.8 GW based on annual average coal consumption of 1.5 Mt.
An Integrated Bankable Feasibility Study report for the entire project indicated total potential revenues of US$ 7.5-8.5 billion over an initial 25-year mine life, post tax equity IRR between 21-22%, debt pay-back period of 11-12 years and a construction period of 36 months.