Name of the Project
Ncondezi coal-to-power project.

Location
The 38 700 ha Ncondezi licence area is located in Mozambique's coal-bearing Tete province, one of the largest undeveloped coal mining regions in the world.

Project Owner/s
Ncondezi Energy.

Project Description
Ncondezi's Joint Ore Reserves Committee-compliant coal resource amounts to 4.7-billion tons, permitting a large and long operation. The Phase 1 power plant will use Mozambique’s present transmission network, reinforced, to carry its output to users. Only about 20% of the country is currently electrified, and the acceleration and expansion of electrification have become government policy.

The Ncondezi mine forms part of the integrated thermal coal mine and power plant project. The power station is expected to initially produce 300 MW, of which 60 MW will be used to operate the power plant, and 240 MW will be supplied to the northern electricity grid for use by users across Tete.

Being built in phases, the power plant project has been designed to be scalable up to a planned maximum capacity of 1 800 MW.

The Ncondezi mine will be the base for the project, and the power plant will be located on the mining concession. The mine will be able to supply 1.1-million tons of coal a year, with an energy-producing capacity of 18.66 MJ/kg for 25 years.

The openpit mine will be 2 km away from the power plant and will have a lifetime capacity of 4.8-billion tons of coal. The coal from the mine – still at a lower quality than export-grade thermal coal – will have to be processed to achieve the desired grade of 18.66 MJ/kg before it can be used by the Ncondezi power plant.

Ncondezi Energy will consider exporting coal when the price of seaborne coal and access to rail and port infrastructure improve in the future.

Some of the other lower-quality coal from the surrounding mines in Tete might also be used to bolster the power station’s coal supply.

Potential Job Creation
During the construction of the Ncondezi power plant and mine, about 2 000 jobs will be created. Once construction of the mine is completed, it will provide 50 permanent jobs while the power plant will provide more than 200 permanent positions.

Net Present Value/Internal Rate of Return
Not stated.

Capital Expenditure
The estimated cost of the power plant is $1-billion and that of the mine between $60-million and $80-million.

Planned Start /End Date
Ncondezi aims to deliver the first power from the project in 2023.

Latest Developments
Ncondezi Energy has confirmed that an updated financial model for its 300 MW coal-to-power and coal mine project is ready to be submitted to State-owned utility Electricidade de Moçambique (EDM) by the end of this quarter.

The company aexpects the tariff negotiation process to be finalised before June.

The financial model is being reviewed by Ncondezi’s partners before it is submitted to EDM. It was recently updated with proposals pertaining to engineering, procurement and construction, as well as operations and maintenance.

The model was also updated with indicative debt terms from the Industrial and Commercial Bank of China, as well as tax and accounting assumptions from auditors KPMG .

Ncondezi has also received a letter of interest from China Export and Credit Insurance Corporation (Sinosure) to provide political and commercial risk insurance for the project.

The updated model is the final milestone to unlock power tariff negotiations with EDM as Ncondezi works to deliver a credible and competitive tariff offer during the first quarter of the year.

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
NPC, tel +44 20 7183 5402 or email info@ncondezicoal.com.