Name and Location
Ncondezi coal project, Tete, Mozambique.

Client
Ncondezi Coal Company.

Project Description
The 38 700 ha Ncondezi licence area is located in the coal-bearing Tete province, one of the largest undeveloped coal mining regions in the world. The project has a total Joint Ore Reserves Committee-compliant resource of 4.7-billion tonnes.

The Ncondezi mine forms part of the 300 MW integrated thermal coal mine and power plant project, located near Tete. The power plant will be located about 90 km from the local transmission network and can be expanded to a capacity of up to 1 800 MW.

The Ncondezi mine will be an openpit operation, targeting production of 1.5-million tonnes a year of saleable product to the proposed mine mouth power plant, at an average yield of 92% and an average strip ratio of 0.61-billion cubic metres a tonne using contractor mining.

Value
$376-million.

Duration
Mine commissioning is planned for the second half of 2016 to meet the power plant stockpile requirements ahead of its commissioning in the first half of 2018.

Latest Developments
Ncondezi Energy has entered the final stages of negotiations on the power purchase agreement (PPA) and the power concession agreement (PCA) for its 300 MW power plant project near Tete, in northern Mozambique.

The company has completed all internal work streams and application requirements to enable the finalisation of the agreements and is in the closing stages of negotiating the key detailed parameters of the PPA and PCA with the Mozambican Department of Energy (DoE) and State energy group Electricidade de Moçambique (EDM).

A revised timeline has been agreed upon with the DoE and EDM and update of both agreements is expected by the end of the third quarter of 2014. The transmission line engineering, procurement and construction (EPC) tender process has been initiated.

In addition, the power plant capital and operating costs have been confirmed through the receipt and further clarification of binding EPC and mine contractor bids. Detailed discussions have been held with export credit agencies and commercial banks regarding the level of financing support.

Ncondezi has received several expressions of interest from potential investors with regard to participating in the equity of the project once it has executed the PPA and PCA.

Moreover, negotiations with potential co-developers are at an advanced stage and the company expects to update shareholders during the third quarter of the year.

Ncondezi is fully funded to complete the PPA, PCA and co-developer processes.

Key Contracts and Suppliers
KPMG (mine feasibility study); Impacto and Environmental Resources Management Southern Africa (environmental- and social-impact assessment) and the Mineral Corporation (geological consultant).

On Budget and on Time?
Too early to state.

Contact Details for Project Information
Ncondezi Coal Company corporate development manager Hanno Pengilly, tel +44 20 7183 5402 or email info@ncondezicoal.com.