Name of the Project
Mbeya coal-to-power project (MCPP).

Location
Tanzania.

Client
Kibo Mining.

Project Description
The integrated bankable feasibility study (IBFS) on the MCPP has concluded that the MCPP is financially, technically and operationally a very robust project.

The IBFS comprises an integration of the definitive mining feasibility study (DMFS), the definitive power feasibility study (DPFS), the integrated financial model for the MCPP and all the other relevant technical studies on the MCPP to date.

The MCPP comprises a 122-million-tonne coal resource, of which 85.9% qualifies for the inclusion in any future reserve statement. Of this, 39-million tonnes are included in the pit design and are sufficient to satisfy the required indicative coal requirement of 39-million tonnes for 30 years.

It has been proven that constant coal production over the total life-of-mine can be achieved.

The mining method developed for the Mbeya coal mine has been confirmed as modified terrace mining. Overburden will be removed using a free dig (truck-and-shovel) method, with coal seam and interburden mining using mechanised continuous surface mining. The DPFS has concluded that the power plant, which will be 250 MW to 350 MW, will require coal with a calorific value of 12.85 GJ/t.

Net power that will be generated has been estimated at 1 840 GWh/y.

Average coal and limestone consumption has been estimated at 1 497 432 t/y (as fired) and 110 359 t/y respectively.

Potential Job Creation
Not stated.

Net Present Value/Internal Rate of Return
The MCPP DMFS estimates an internal rate of return of 69.2% with a payback of 2.4 years.

Value
The MCPP DMFS estimates a peak funding requirement of $17-million.

No new figures have been released in the DPFS.

Kibo Mining remains restricted in its ability to release certain detailed information pertaining to the IBFS, owing to the company’s being engaged in highly confidential discussions with various parties, including regulatory authorities. Such information is commercially sensitive and could result in a breach of Kibo’s confidentiality obligations, subsequently harming the company’s chances to successfully complete negotiations.

The most recent figures, released in the April 2016 DPFS, confirmed the total estimated project cost of the thermal power plant as below the cost estimate stated in the power prefeasibility study (PFS) released in 2014. The power PFS estimated the project’s total cost, depending on the plant option selected, at between $640-million and $760-million.

Duration
Not stated.

Latest Developments
Following the submission of Kibo Mining’s local-content plan (LCP) and integrity pledge (IP) to the Mining Commission – a constituent of the Tanzania Ministry of Mines – the authority will be ready to consider Kibo’s application for a special mining licence for the MCPP.

An LCP requires that, when procuring goods and services, priority be given to Tanzanian firms, as well as that qualified Tanzanians should be considered first for employment and training opportunities.

The IP is a formal and concrete expression of commitment to abide by ethical business practices and support a national stand against corruption.

Special mining licences in Tanzania are awarded to projects with a capital expenditure requirement of more than $100-million, following production of a positive feasibility study and meeting all other criteria.

The licences are issued for the life-of-mine, which in Mbeya’s case is between 25 and 32 years.

The licence will be subject to a comprehensive mining development agreement with government. On receipt of the licence, Kibo can exploit the 121-million-tonne coal resource at the Mbeya deposit, as part of its strategy to build a 300 MW mine-mouth coal-fired power station.

Key Contracts and Suppliers
Sepco III (engineering, procurement and construction contractor) and GE (equipment, technology and services).

On Budget and on Time?
Not stated.

Contact Details for Project Information
Kibo Mining, tel +353 91 865367, fax +353 91 755066 or email info@kibomining.com.