UK company Edenville Energy will start developing the Rukwa coal project, in Tanzania, in June, following the granting of a mining licence by the authorities in that country.
Edenville CEO Rufus Short says the first coal will be produced 18 months later.
The licence was awarded to Edenville International, a wholly owned subsidiary of Aim-listed Edenville Energy.
“We are delighted that the mining licence for our Rukwa coal deposit has been formally released. This allows us to start preparatory groundworks within the next three months, followed by a formal opening ceremony to break ground during the third quarter of this year and the commencement of commercial production within 18 months,” he says.
The licence gives the company exclusive rights to search for, mine and process coal mined in the area, covering about 8.49 km2, and to transport and market the coal. The licence is valid for ten years.
The Rukwa project involves the development of a coal mine and the building a coal-fired power station with capacity to generate 300 MW.
Edenville is already in negotiation with Tanzanian authorities with respect to a framework agreement that will pave the way for a power purchase agreement and for the erection of a transmission line.
The Rukwa project is located in the Ngaka coalfields of south-west of Tanzania, where coal reserves estimated at about 1.5-billion tons have been discovered.
Tanzania is aiming to produce at least 5.5-million tons of coal a year by 2020, up from the current100 000 t.
A company called Kibo Mining also plans to develop a coal-to-power project in the area.
The authorities in Tanzania want the companies to accelerate development of the mines to increase electricity generation to power economic growth and connect more people to the national grid.