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 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.

All-in Sustaining Costs/All-in Costs
Not stated.

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 is at an advanced stage with the project financing model for the Ncondezi project and expects sign-off from its partners before the end of March.

Once the financial model is signed off, the company can start with a formal tariff offer submission to State-owned utility Electricidade de Moçambique.

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

The financial model has undergone several optimisation iterations, with input from the company’s partners.

The model contains details about the project’s engineering, procurement and construction, and operations and maintenance proposals, indicative debt terms from the Industrial and Commercial Bank of China, a letter of interest from the China Export and Credit Insurance Corporation, as well as tax and accounting assumptions from auditors KPMG.

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.