JOHANNESBURG (miningweekly.com) – Preliminary results from a review of updated proposals for the engineering, procurement and construction (EPC), and operations and maintenance (O&M), contracts for Ncondezi Energy’s integrated 300 MW power and coal mine project, in Tete, Mozambique, are positive.
Ncondezi nonexecutive chairperson Michael Haworth on Thursday said that, although the review is still at an early stage, the preliminary results allude to the potential for the presentation of a more competitive tariff to the Mozambican government and the utility for approval.
Ncondezi is working to conclude a binding joint development agreement (JDA) for the project and, in April, received the updated EPC and O&M contracts for internal review.
Ncondezi states that the positive results continue to indicate the viability of the project and confirm economics, such as that there is the potential to deliver a more competitive power tariff to State-owned power utility Electricidade de Mocambique and the Ministry of Mineral Resources and Energy for approval.
The submission of the financial model to these authorities is targeted for June to seek in-principle support for a new power tariff envelope, which is the company’s main priority.
“This represents a significant milestone in the project development process as the company did not reach this stage of development with its previous potential partner,” Haworth said.
He added that, should support be received for the new tariff envelope, Ncondezi believes it will be well positioned to close out the JDA process and move the project to financial close.
The project comprises two 150 MW coal-fired power plants, an openpit coal mine and a 2 km conveyor connecting to the power plant, together with common infrastructure – water dams, dumps, electrical reticulation and villages – and a 92 km transmission line that connects into the Mozambican power grid.