Name of the Project
Rukwa coal-to-power project (RCPP).

Location
Tanzania.

Project Owner/s
Edenville Energy.

Project Description
A feasibility study completed on the project has indicated an economically sound project with a 30-year, 120 MW coal-fired power plant. There is the possibility that the power plant could be scaled up to 300 MW.

The Rukwa coalfields comprise the Mkomolo, Namwele and Muze deposits.

The project hosts 173-million tons of measured and indicated coal, sufficient to support the station over the life of the project.

Output has been estimated at 10 000 t a month.

Potential Job Creation
Not stated.

Net Present Value/Internal Rate of Return
Independent power modelling consultancy Diamond Energy has completed a new financial model for Aim-listed Edenville Energy’s RCPP.

The new financial model builds on and validates the results and integrity of the financial model compiled from the results of the 2015 power plant feasibility study.

It has resulted in a 14% increase in the project’s pretax net present value to $252-million, from the previous estimate of $220-million, while the internal rate of return has improved to 23.4%, compared with 23.1% in the 2015 study.

Capital Expenditure
The capital expenditure to deliver a combined mine and 120 MW power plant is estimated at between $180-million and $200-million.

Planned Start /End Date
Not stated.

Latest Developments
Edenville Energy has signed two new significant contracts to supply washed coal from the Rukwa coal project.

The two contracts are for the supply of up to 6 000 t and up to 3 000 t, respectively, of washed coal a month to industrial customers in Rwanda and Uganda.

The up to 6 000 t a month supply contract has been signed with Rwandan company Tara Group, a wholly owned subsidiary of Tanzanian company Kitanyoe Group, which currently supplies coal, gypsum, limestone and calcite to industrial users.

The end-user for the company's coal is expected to be a major cement manufacturer in Rwanda.

The up to 3 000 t a month contract has been signed with Ugandan company Springwood Capital, with the expected end-user being a Kampala-based steelworks. As with the Tanzanian agent, Springwood supplies limestone, gypsum, calcite and iron-ore to consumers in Uganda and Kenya.

The Rwanda contract is of particular importance for the Rukwa project as it has the potential to open up a major new transport route for the company's coal on Lake Tanganyika to Rwanda and Burundi, Edenville has said, highlighting that this route is shorter than conventional truck transport and more cost-effective, using low-cost barge transport.

The two new contracts will account for about 75% of the current capacity of the recently refurbished wash plant at Rukwa. The new contracts will also complement the existing long-term contracts, Edenville has said.

The progression of these supply arrangements was, however, dependent on the company securing sufficient operating capital to fund production, Edenville announced in November.

In this regard, discussions with the potential strategic investor in the project are progressing and a second investor has expressed interest in becoming involved with the company as a strategic shareholder at the company level. 

While there is currently no certainty that these negotiations will lead to a successful outcome for Edenville, the company believes the two new contracts increase the attractiveness of the project and the company for potential investors. 

Assuming sufficient working capital is available, Edenville expects to be in a position to supply coal on an ongoing basis under these contracts before the end of the first quarter of 2020.

Edenville expects cashflow breakeven at Rukwa at about 4 500 t of washed coal sold monthly and has a target of achieving this by May 2020.

Since opening up the Northern mining area earlier this year, the company has expanded its marketing efforts in the countries to the north of Tanzania, in particular Uganda, Rwanda, and Burundi, where Edenville's directors believe the company has a competitive advantage over other Tanzanian coal producers, many of whom are located up to 700 km further south of Rukwa.

Key Contracts and Suppliers
Not stated.

On Budget and on Time?
The project is on track.

Contact Details for Project Information
Edenville Energy, tel +44 20 7653 9850 or email info@edenville-energy.com.