JOHANNESBURG (miningweekly.com) – Dual-listed Kibo Mining has appointed project engineering group Tractebel Engineering to conduct the definitive feasibility study (DFS) for the Mbeya coal-to-power project (MCPP), in Tanzania, and to continue, thereafter, as owner’s engineer during subsequent development stages of the project’s power component, the miner said on Monday.
The agreement followed a period of negotiations during which Kibo said Tractebel demonstrated a “very keen” understanding of the challenges the company was facing at this stage of the project’s development.
Around 55% of the cost associated with the work on the DPFS would only be payable after completion of the feasibility study, of which a substantial part would only be payable near or at the time when the MCPP reached financial close.
Work on the DPFS would start immediately, while the appointment of Tractebel to conduct the DPFS would happen within the framework of a broader cooperation agreement that extended beyond the scope of the DPFS and the development and construction phases of the MCPP.
Kibo CEO Louis Coetzee believed the deal marked a major strategic breakthrough in the development of the project.
“Tractebel has one of the best international reputations for the development and construction of power facilities, such as the MCPP. The project will benefit immensely from [its] wealth of experience and knowledge . . . [and] the commercial terms on which Tractebel was engaged will, furthermore, relieve pressure on Kibo’s short-term cash flow requirements and funding needs substantially.
“This will, in turn, potentially enable Kibo to complete the DFS for both the mine and the power plant and to advance the MCPP up to bankable feasibility study without the need to give away any of Kibo’s equity in the MCPP, of which the company still owns 100%,” he commented.